The Vacant Home Tax applies to properties that are unoccupied or otherwise deemed vacant. The objective of the tax program is to help the City of Toronto create more affordable housing. Money from this tax will be used to support affordable housing initiatives.

Homeowners in Toronto must declare if their property was vacant for more than six months in the previous year. The deadline to do this is February 2, 2023. The online form to make this declaration will be available in December 2022.

All homeowners in Toronto must tell the city every year if they live there or not. The owner or someone they trust can make the declaration. This will determine if they must pay a Vacant Home Tax.

This means that if you own a house or apartment, you can leave it empty for up to six months during the year and you won’t have to pay a special tax for it. But, you are still required to declare your property status.

The amount of the tax is 1% of the property’s Current Value Assessment (CVA). So, if the CVA of your property is $1,000,000, you will owe $10,000 in taxes (1% x $1,000,000). The tax has to be paid the year after your property is declared vacant. For example, if your home is vacant in 2022, you will have to pay the tax in 2023.

You need to tell the City of Toronto if your house is occupied or vacant. To do this, you have to have your 21-digit assessment roll number and customer number, which can be found on your tax bill or property tax account statement. In mid-December 2022, you can go to the City’s website and make your declaration through their secure online portal. If you need help, you can call 311 and they will mail you a paper form to fill out. You need to make sure the form is complete and mailed back to the city before the deadline or else you could get a fine. If your house is occupied, but not by you, you will need to tell the city who is living there. If your house is declared vacant for 6 months or more, you will have to pay a Vacant Home Tax. You will get a notice in March/April and have to pay it by May 1. If you make an error in your declaration, you can fix it before the deadline on February 2 or file a Notice of Complaint after the deadline. If you don’t declare or make a false declaration, you could get fined $250 to $10,000.

Purchasers and vendors must understand and take responsibility for the Vacant Home Tax. It can put a lien on the property and any taxes not paid will be the buyers responsibility. Between Jan 1 and Feb 2, the seller must fill out the declaration before closing. For closings after Feb 3 to Dec 31, the buyer must give in a declaration the following year and get the “transfer of legal ownership” exemption. Sellers need to give buyers a copy of the declaration and a statement that it is true and correct.

The City may ask for proof that you are living in a residential property or qualify for an exemption. You may be asked to submit documents such as car registration, ID cards, tax returns, lease agreements, wills, pay statements, insurance certificates, declarations, or affidavits. You must keep all these documents for 3 years.

If you disagree with the Vacancy Tax Notice or Supplementary Assessment, you can submit a Notice of Complaint. You must do this within 10 business days of April for the Vacancy Tax Notice, or within 90 days of the Supplementary Notice. You will also need to provide your assessment roll number, customer number, and contact information. If someone else is filing on your behalf, they must include their relationship to you and their authority to do so. You must also explain why the property should not be taxed and include any evidence you have. You may be asked to provide more info or documents. The city will give you an answer in writing within 30 days.

If you disagree with the decision on your Notice of Complaint, you have 90 days to submit an appeal. The appeal is only about the same issues from your complaint unless the result of your complaint changed the assessment. Your appeal must include: – The Assessment Roll and Customer number – Your name and contact info (phone and/or email) – If you are not the owner, tell us your relationship to them and that you can act for them – Why you don’t think the tax should apply to your property – Evidence that supports your reasons The City will review your appeal in 90 days. The Appellate Authority will decide to accept or reject all or part of it. Within 30 days of the decision, the city will change, vary, or review the assessment. The decision is final.

If you do not pay your Vacant Home Tax by the due date, you will be charged interest and fees. You may also receive a fine if you do not make a declaration by the deadline or if you break any of the offenses listed. Fines range from $250 to $10,000 per offense.

Our team at LandLord Property & Rental Management is actively researching the new Vacant Home Tax and we are developing the strongest strategies to navigate the new landscape that this program introduces.

If you would like more information or clarification on any of the above information, or if you would like to schedule a free consultation, contact us today.

For more information (and the source of the above information), visit: https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-assessment-and-appeals/