As a property owner, you should be aware of the Vacant Home Tax that was passed by the Toronto City Council in July of 2021 and which took effect on January 1 of 2022. But were you aware that there is a declaration notice that must be filled out by February 2 of 2023 or you could face a $250 fine and up to $10,000 for making a false declaration?
Notices were mailed out to owners of houses and condos with regards to the Vacant Home Tax in which you must declare whether to not your property is vacant. If you did not receive a notice then you can access it here via the online portal:
Be aware that, according to this new tax, if the property is deemed to be vacant, a tax of one per cent of the home’s accessed value will then be added to the property tax bill for that property starting in the spring of 2023, with the city issuing formal tax notices in March and April. So, if the property is assessed at $1,500,000 then the added tax is $15,000.
To read what the city considers to be a vacant property and thus ends up being qualified for this new tax, you can read this link here:
But here are my quick notes on the qualifications:
Taking effect as of January 1, 2022, any residential property that sits empty for more than six months in any given year, will be subject to the vacancy tax.
A property may be left vacant and exempt from the tax only if one of the following criteria applies:
– the registered owner passes away
– the property is undergoing repairs or renovations
– the principal resident is in a care facility
– the property is undergoing a transfer of legal ownership
– the property is required for occupation for employment purposes
– there is a court order in place prohibiting occupancy
The city claims that the goal of the vacancy tax is to “increase the supply of housing” and that the collected vacancy taxes will go to affordable housing initiatives. Whether this new form of taxation benefits everyone as claimed or whether this turns out to be another tax collected for the ever growing and money draining bureaucracy within the City of Toronto will remain to be seen.
We have a leasing specialist on our team and, if leasing is the method by which you can shield yourself from this tax, contact us to discuss your options.
We are here to help.