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January 5 2023 | Buying/Selling

What is the Torontos Vacant Home Tax?

As a Toronto real estate agent, I’m here to educate you on the new vacant home tax and how it will affect homeowners. The Vacant Home Tax, also known as the Owner-Occupied Non-Residential Property Tax (ONRPP), went into effect on January 1, 2019. It’s meant to encourage homeowners who own vacant properties in Toronto to rent empty homes or sell them before they become vacant.

What is Toronto’s Vacant Home Tax

A vacant home tax is a municipal tax that can be levied on residential property owners whose city has determined to be holding their property empty, with no intention of using it. It’s not a new concept—several cities in the United States have implemented them, and Toronto just became the first Canadian City to do so.

The tax is triggered when a vacant property’s owner fails to meet any one of several conditions:

  • The owner only occupies the home as their principal residence after having done so within two years before December 31 of the previous year.
  • The owner only rents out their home through an online marketplace such as Airbnb within three months after receiving notice from the City of Toronto regarding its intent to impose this tax on your property.

Your deadline to declare

The deadline to declare your property as vacant is February 2, 2023. You have 30 days after this date to submit your declaration online or by mail. If you do not declare within 30 days, you will be charged an additional penalty of $100 per month for each month until a declaration is made. You can also request a waiver if you cannot declare online or by mail due to financial hardship.

How to declare

As a homeowner, you can declare your property a vacant home by visiting the City’s website. Could you fill out the online form and submit it on the site? Once you submit your declaration, you’ll receive an email from the City of Toronto with more information about how to pay your vacant home’s tax.

The fee is calculated based on one percent of the Current Value Assessment (CVA) of the property. It will be imposed on all Toronto residences that are vacant for more than six months during the previous year. For example, if the current value assessment of your property is $750,000, the tax amount billed would be $7,500 (1% x $750,000).

The exemptions

  • If the owner dies and the property is vacant for more than 6 months
  • If the property is undergoing renovations that prevent normal living conditions
  • If the owner is injured and hospitalized, in a long-term or support facility for more than six months (cannot exceed two years)
  • If there is a transfer in ownership
  • If there is a court order that prohibits occupancy
  • If the vacant property is needed for employment purposes

Toronto’s new property tax is meant to curb the growing number of vacant homes. Visit their website to learn more about the Toronto real estate property tax or better connect with the Toronto realtor to help you. Contact info below:

Danielle Demerino

Brittany Huggins