Toronto’s Vacancy Tax
What is it, what you have to do and what happens if you ignore it.
In desperation for Toronto’s elected officials to curb the rapid rising home prices, they introduced the Home Vacancy Tax.
Similarly to Vancouver, they imposed a tax on your home should your home be vacant for 6 month period. Un-similarly to Vancouver, vacant properties are not a major issue effecting Toronto’s rising prices. Regardless of the looming effect, you do need to fill out these forms.
You are required to self declaration for your property including your primary residence and any other residential properties you own. You or your occupants, such as a tenant, need to occupy any residential dwelling for a minimum of 6 months every year or you will be subject to the tax. Self declaration is required by Feb 2nd 2023 for the past year (2022). Properties may also be deemed vacant if you fails to make a declaration of occupancy status as outlined in the bylaw. And this tax will be slapped onto your annual property tax bill at the rate of 1 % of your assessed value.
If you’re home is assessed at 1 M, this is a 10,000.00 annual tax.
There are exceptions. Land, parking spaces, lockers, basically anything that does not have a residential unit are exempt. So are homes vacant due to the death of a registered owner, a property undergoing redevelopment or significant renovation, and restrictions that prevent a unit's occupancy.
If you are purchasing real estate, this could become problematic. Your lawyer will need to ensure that the new tax has been filed and paid in full. The city plans to registered liens against the property should this tax be left unpaid. Property taxes are registered with the property not with the home owner, so any unpaid taxes will remain with the home that you just purchased. Just be careful!
Do you need more information? Check it all out here.
Or reach out to us.