Toronto Vacant Home Tax
Understanding who it applies to, how it's calculated, and what every Toronto homeowner needs to know to stay compliant.
The City of Toronto introduced the Vacant Home Tax (VHT) to encourage property owners to occupy or rent their properties, thereby increasing the availability of housing in the city. If you own a residential property in Toronto, it is important to understand your obligations under this bylaw.
What Is the Vacant Home Tax?
The Vacant Home Tax is an annual tax levied on residential properties in Toronto that are vacant for more than six months in a calendar year. The tax is intended to deter property owners from leaving homes empty while the city faces a housing shortage.
The current rate is 3% of the property's Current Value Assessment (CVA) for the taxation year. This rate was increased from the original 1% to further incentivize occupancy.
Who Must Declare?
All owners of residential properties in Toronto are required to submit an annual declaration of occupancy status by the deadline set by the City — typically February 2nd of each year. This applies even if your property is occupied.
Important: Failure to submit a declaration will result in your property being deemed vacant and the tax being applied automatically. There is no exemption for simply forgetting to file.
Exemptions
Certain properties may be exempt from the Vacant Home Tax, including:
- Properties where the owner passed away during the tax year
- Properties undergoing major renovations with active permits
- Properties where the owner requires care in a hospital, long-term care facility, or supportive housing
- Properties that are occupied by a permitted occupant such as a tenant
- Properties that are the principal residence of the owner
How Is the Tax Calculated?
The tax is calculated as a percentage of the property's Current Value Assessment (CVA) as determined by the Municipal Property Assessment Corporation (MPAC).
For example, if your property's CVA is $1,000,000, the Vacant Home Tax would be:
$1,000,000 × 3% = $30,000 per year
How to Comply
To comply with the Vacant Home Tax bylaw, you must:
- Log in to the City of Toronto's online portal before the annual declaration deadline
- Declare the occupancy status of your property accurately
- Retain supporting documentation in case of an audit or complaint
- Pay any applicable tax by the due date to avoid penalties and interest
Audits and Appeals
The City may audit declarations. If you receive an audit notice, you will be required to provide documentation supporting your declared status. If you believe the tax has been incorrectly applied, you have the right to file a complaint with the City within a specified timeframe.
How KAM JURIS LAW Can Help
Navigating municipal tax obligations can be complex, especially for property investors, estates, and non-resident owners. Our team can advise you on your obligations, assist with exemption applications, and represent you in the appeals process if the tax has been incorrectly assessed.
