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The New Toronto Vacant Home Tax: What Toronto Real Estate Owners Need to Know

Overview

In this article, Toronto real estate lawyer, Antonio DiMinno, of DiMinno Rizzi Lawyers, provides an overview of the new Toronto Vacant Home Tax.

What is the Toronto Vacant Home Tax?

As of February 2, 2023, all Toronto property owners will be required to declare their property’s 2022 occupancy status. If a house has not been occupied for more than six months in the last year, it will be considered “vacant” and liable for a tax of 1% of the property’s assessed value. So, for example, if the property is worth $2 million dollars, the owner will be subject to $20,000 in taxes in the following year. 

The main goal of this new tax is to increase housing availability and therefore make housing more affordable.  

The Vacant Home Tax applies to Canadian residents and non-resident real estate owners.

Vacant Home Tax Exemptions

Although all property owners will be required to submit a declaration of occupancy status, the tax does not apply to:

  • Properties which are the principal residence of the owner
  • Properties that are the residence of a permitted occupant or tenant
  • Properties owned by a registered owner who is deceased
  • Properties undergoing repairs or renovations
  • Properties where the principal resident is in the hospital or long-term care
  • Properties purchased by a third party in the tax year
  • Properties where there is a court order prohibiting occupancy

How to Declare

All Toronto property owners will be required to declare their status of their property every year, regardless of whether a tax exemption applies. Homeowners can declare their status at the City of Toronto’s secure online declaration portal.

Where residential properties are declared vacant, the property owner will receive a tax notice in March or April, with payment due on May 1st. A residential property will be deemed vacant if the owner fails to make the declaration or provide supporting information by the deadline. A homeowner could be liable for a fine of $250 to up to $10,000 for failure to declare or making a false declaration.

How an Toronto Real Estate Lawyer Can Help

Have questions or concerns about the new Vacant Home Tax and its’ consequences for your real estate? Contact us anytime for a free strategy session!

 

Antonio DiMinno

647-205-9128

antonio@drlawyers.ca

Contact us today for a free strategy session!

 

Disclaimer: All number figures are approximate only and may be subject to change. Like all material on this website, this is not financial, legal, or tax advice. Contact a professional for your specific situation. 

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