Toronto’s Vacant Home Tax: What You Need to Know in 2024

What Is the Vacant Home Tax?

Toronto’s Vacant Home Tax (VHT), introduced in 2022, is designed to encourage homeowners to rent or sell unoccupied homes and address the housing crisis. The tax applies to properties left vacant for more than six months, unless they qualify for an exemption, such as being the owner’s or a permitted occupant’s principal residence.

The tax is set at 1% of the home’s appraised value and is expected to increase to 3% in 2025. Homeowners must submit an annual Vacant Home Tax Declaration of their property’s occupancy status. Failure to declare by the deadline results in the tax being automatically applied.

This tax is separate from the federal Underused Housing Tax (UHT), which targets vacant homes owned primarily by foreign nationals.

For example, if a home is valued at $1 million, a 1% VHT would result in a $10,000 tax. The goal is to incentivize homeowners to use their properties instead of leaving them vacant.

What’s Happening with Toronto’s Vacant Home Tax in 2024?

The city began accepting VHT declarations on December 1, 2023, with an initial deadline of February 29, 2024. However, with only 63% of declarations submitted on time, the city extended the deadline to March 15, 2024.

Despite the extension, many homeowners didn’t file their declarations, and thousands of others who did still received assessments. In total, around 125,000 homeowners were assessed the tax, with many claiming they qualified for an exemption.

Part of the confusion stems from the annual manual declaration requirement, which differs from similar taxes in other cities. In Vancouver, for example, late declarations are accepted up to five months after the deadline, while in Toronto, homeowners must file a Notice of Complaint to dispute their assessment.

What Is Toronto Doing About the Complaints?

Since the assessments were issued, over 62,000 Notices of Complaint have been filed. The city has already reversed many of the charges and is taking additional steps to help homeowners, including:

• Doubling the staff providing support at City Hall and Civic Centres.
• Sending explanatory letters to impacted homeowners to clarify the tax and let them know they may be exempt.
• Updating the Vacant Home Tax website in multiple languages.
• Coordinating with Toronto Revenue Services and 311 to assist residents.

The Mayor and city council have also announced plans to:

• Suspend late fees on taxes improperly assessed.
• Waive the $21 fine for missing the declaration deadline.
• Streamline the complaints process to ensure quicker resolutions.

How to File a Vacant Home Tax Notice of Complaint

If you missed the declaration deadline but your property was occupied in 2023, you don’t have to pay the assessed tax. Here’s what you need to do:

• Don’t pay the assessed tax to avoid late fees. While the City of Toronto website says that 1.25% interest will be charged on unpaid amounts, Mayor Olivia Chow has announced plans to suspend late fees for improperly assessed VHT amounts.
• Do file a Notice of Complaint if you’ve been incorrectly assessed. You can file online, but make sure you have your Assessment Roll Number, Customer Number (found on your property tax statement), and any supporting documents proving your property was occupied.
• Do file a Notice of Appeal within 90 days if you disagree with the decision on your complaint.

What Documents Count as Proof for a Tax Exemption?

To claim an exemption from the VHT, you’ll need documents that prove your property was occupied. Examples include:

• Ontario vehicle registration and insurance documents.
• Government-issued ID with your address, such as a driver’s license.
• Income tax notices of assessment.
• Lease agreements or bank statements showing rental income.
• Homeowner’s or tenant’s insurance certificates.
• Court orders prohibiting occupancy.
• Work orders or contractor receipts showing repairs/renovations.
• Building permits for repairs or renovations.

What’s Next for Homeowners?

The city is working quickly to resolve the complaints, and most cases are being addressed efficiently. For foreign nationals who own property in Canada, remember that you must also file your Underused Housing Tax declaration by April 30 each year.

If you’ve received an unexpected VHT assessment, don’t panic. Follow the steps to file a Notice of Complaint, gather your documentation, and be sure to stay updated on any changes the city may announce in the coming months.



Key Takeaways:

• If you’ve been assessed for the Vacant Home Tax, you can still file a Notice of Complaint.
• You’ll need to provide tax information and proof that your property was occupied to claim a tax exemption.
• Essential documents for exemption include identification, lease agreements, or other official proof of occupancy.