Toronto City Council Approves Plan to Implement Vacant Home Tax

August 11, 2021

Toronto city council has approved a plan to implement a vacant home tax starting next year.

In a news release issued Thursday July 15th, city officials said the goal of the tax is not to collect revenue, but to create a disincentive for homeowners to keep their homes vacant and in turn increase the housing supply.

The idea is to have these houses being turned into somebody’s home. Keeping a home locked up and unavailable for habitation is up to the homeowner, but it will come at a price.

“A bylaw supporting this tax will come into effect on Saturday, January 1, 2022, becoming the start of the first tax reference year — a period during which the vacancy status will be used to determine whether the tax is payable,” the news release said.

“The tax on vacant homes becomes payable for the first time in early 2023, based on the occupancy status during the prior year.”

Officials said a home will be considered vacant if it was unoccupied for more than six months in the previous calendar year “or it is deemed to be vacant under the by-law.”

Exemptions include homes under renovation, snowbirds, if the homeowner is in medical care or passes away.

“I’m happy to see council approved a vacant home tax today. While a majority of Toronto property owners will not pay this tax, the benefits will be felt across the city by increasing the availability and affordability of housing supply,” Mayor John Tory said in the release.

The tax rate will be one per cent of the home’s current value assessment for the year in which the home is vacant.

Officials said it’s not clear how many homes in the city are vacant, but assuming one per cent are vacant, the City could generate $55 to $66 million per year.

Tory said the tax will also help to build more affordable housing.

As part of the plan, property owners will be required to declare the status of their residential home each year, determining the home’s occupancy status and whether the tax is payable. This will be available to be done online or via mail. The responsibility to declare a property is on the owner, says the city.

Council will is set to review a final report and tax bylaw by the end of the year. The bylaw must be enacted for the tax to take effect. Full details are available in the City staff report here

Courtesy of: Ryan Rocca, Global News and Toronto Regional Real Estate Board