If you own a residential property in Toronto, you need to let the City know if it is occupied or vacant by April 30 to avoid paying the Vacant Home Tax (VHT).
The VHT program was introduced in 2021 and according to the City’s website, its goal is to alleviate Toronto’s housing crisis by encouraging owners of vacant residential properties to either sell or rent them out, thereby increasing housing supply.
“Owners who choose to keep their properties vacant are subject to a tax, with the revenue being allocated to affordable housing initiatives,” says the website.
The rate of taxation is 3 per cent of the property’s current value assessment.
Who is required to declare occupancy status and how is it determined?
All owners of residential properties, including condo units, must declare occupancy status every year, even if they live there or qualify for an exemption from the tax (listed below). If they own multiple properties, separate declarations must be submitted for each one.
A property is considered occupied and requires a declaration of occupancy status if:
- It is the homeowner’s principal residence for at least six months of the taxation year, even if they leave for extended periods of time due to work or travel.
- It is occupied by someone else like a tenant or business tenant with a written agreement for a term of at least 30 days and an aggregate of at least six months during the year.
- It is occupied by friends or family who use the property as their principal residence for at least six months during the year.
- The principal resident is away from home and receiving outpatient care or the principal resident is away caring for a sick family member or friend, as long as the property remains the principal residence.
- The property has multiple units (duplex, triplex, co-op.) and at least unit was occupied for six months or more.
- A business is being operated out of a residential property by the owner or a tenant.
There is no need to submit a declaration of occupancy status if:
- The property is newly constructed and has not yet been assessed by the Municipal Property Assessment Corporation (MPAC).
- The property is assessed fully as multi-residential, commercial or industrial.
- The property is classified as vacant land, parking space or a condo locker.
A property will be considered vacant if it is unoccupied for six months or more during the tax year, or if the owner fails to declare occupancy status by the deadline.
How to submit your declaration
The declaration can be summitted by the property owner or an authorized representative.
You will need the following information:
- Customer number
- Address or 21-digit assessment roll number available on your property tax bill, property tax account statement or Vacant Home Tax notice.
The City says its online portal is the quickest way to submit your declaration.
An option to declare by phone is available for those with occupied properties only — call 3-1-1 or 416-392-2489
If you prefer to submit a declaration in person, you can do so at the following locations:
- Toronto City Hall
- York Civic Centre
- East York Civic Centre
- Etobicoke Civic Centre
- North York Civic Centre
- Scarborough Civic Centre
Exemptions from the Vacant Home Tax:
A vacant property must be declared but is exempt from VHT under the following criteria:
- The property was left vacant for six months or more because of the death of the owner. This exemption can be claimed for up to three consecutive taxation years if the owner of the unit died in the taxation year or in the two previous taxation years. A copy of the death certificate is required to support the claim.
- The principal resident of the property is in care – either a hospital, long term or supportive care facility – for at least six months during the taxation year. This exemption can be claimed for up to two consecutive taxation years. A signed letter from the healthcare facility on their letterhead as well as proof that the property was the principal residence of the person before entering care is required to support this claim.
- The property is undergoing major renovations and it is not possible to occupy it or use it normally for at least six months of the taxation year, all permits have been issued for the renovations and the City confirms that work is actively being carried out without unnecessary delays. A copy of the building permits and a description of the work along with supporting documents like work orders and contractor receipts are required to support this claim.
- The ownership of the property was legally transferred and the sale closing date was in the taxation year being declared. This refers to 100 per cent transfer of the property and does not include name changes and adding or removing a second owner. A copy of the land transfer deed is required to support this claim.
- The vacant unit is needed for residential purposes because the owner or their spouse is employed full-time in Toronto for at least six months during the year. The unit owner must have a principal residence outside of the Greater Toronto Area (GTA). Proof of residency outside the GTA as well as a signed letter from the employer on the company letterhead confirming the person must be physically present in Toronto for the purposes of work are required to support this claim. An employment contract is also acceptable.
- The unit is needed by the owner, their spouse or a dependent for medical reasons and their principal residence is outside the GTA.
- A court order has been issued which prohibits occupancy of the property for at least six months of the taxation year. A copy of the court order is required to support this claim. Proof of residency outside the Greater Toronto Area and a completed Vacant Home Tax Medical Treatment Certificate Form is required to support this claim. .
- Developers can claim an exemption for a newly constructed residential unit for up to two consecutive years if: the unit was not occupied as a residence at the end of the last business day of the taxation year and it was not occupied for residential purposes since it was constructed, the unit was actively offered to the public for sale in the taxation year and the developer is the owner of the unit.
Click here for more information about in-person support, paying the tax and disputing the bill.
