Toronto’s Vacant Home Tax (“VHT”)
![An empty flat in a Vacant Home Tax eligible house](https://kpcpa.ca/wp-content/uploads/2023/10/kari-shea-JaWhDrtNlXw-unsplash-scaled-1-552x373.jpg)
The City of Toronto will levy Vacant Home Tax of 1% on unoccupied residential property(s), with the goal of increasing housing supply by discouraging owners for their properties vacant. Revenues from the VHT will be allocated to Toronto’s affordable housing initiatives.
Toronto’s Vacant Home Tax or British Columbia’s Speculation and Vacancy Tax are similar but separate municipal
This article will outline the VHT in easy-to-understand terms, however, it is useful to understand key terms when reading about the VHT online:
All Residential Property Owners in Toronto are required to declare the occupancy status of their property(s) annually, even if it is their Principal Residence.
Declarations must be made by the homeowner or someone acting on behalf of the owner.
The City of Toronto’s online portal to declare a property’s occupancy status will open in the fall, and is due February 2nd of the year following the tax year in respect to where the declaration is made.
If you missed the deadline to file, you must submit a Notice of Complaint to the City of Toronto (see below for further information).
Occupancy Status of Residential Property are classifications in your filing with the City of Toronto, which determine whether it is vacant, and therefore subject to VHT.
If you fit one of the below criteria – then you do not need to pay the tax. A Residential Property is vacant if it is not:
The exemptions are limited circumstances where the Residential Property may be left unoccupied or vacant, and still be exempt from the VHT:
VHT has implications for both the purchaser and vendor on acquisition and disposition of Residential Property:
Purchaser | Vendor |
– Ensure declaration for VHT has been filed – Liability for any unpaid taxes will be assumed – Transactions closing between February 3 – December 31, must complete declaration in the following year; qualifies for transfer of legal ownership exemption |
– Ensure declaration for VHT has been filed – Provide a statutory declaration at closing confirming the filed property status declaration is true and correct – Transactions closing between January 1 – February 2, must complete declaration prior to closing – Provide a copy of the completed and filed property status declaration to the Purchaser |
The VHT calculation is: 1% x Current Value Assessment (“CVA”) per your Municipal Property Assessment Corporation (“MPAC”) property assessment notice
The tax is based on the previous year, i.e., if the home is vacant in 20X2, it will be payable in 20X3. Owners subject to the VHT will be issued at notice at the end of March, with payment due in three instalments in May, June, and July.
For example, if your CVA value is $1,500,000 in 20X3 the tax will be 1% x $1,500,000 = $15,000, which will be payable in three instalments of $5,000 in May, June and July 20X4.
Payments can be made through:
Ensure payments are made on or before the due date, the City of Toronto calculates interest on overdue payments at 15% per annum.
Failure to file a declaration of occupancy status, or if you make a false declaration, may result in a fine of $250 – $10,000.
Under the by-law, the City is authorized to audit or examine documents relating to your Residential Unit, and any exemption made on your statutory declaration.
Types of supporting documentation you should keep include, but are not limited to:
A Notice of Complaint can be filed either online or via mail (City of Toronto, Revenue Services, Vacant Home Tax Complaints/Appeals, 5100 Yonge St., Toronto, ON M2N 5V7) if:
Your complaint needs to include:
The City may follow-up with your Notice of Complaint and ask for supporting documentation, as noted above, ensure these are submitted by the prerequisite timelines in order to be considered.
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