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Toronto's Vacant Property Tax

Toronto has implemented a new vacant property tax in an effort to address the issue of empty homes and buildings in the city. The tax, which went into effect in 2022, is intended to encourage property owners to put their unused or underutilized properties back into the housing market. Other cities in the GTHA have also considered implementing a similar tax.

The tax is based on the value of the property and is applied to residential properties that have been vacant for more than six months in a calendar year. The goal of this tax is to increase the availability of housing in the city by incentivizing property owners to rent out or sell their empty properties. Additionally, it aims to generate revenue for the city, which can be used to fund affordable housing initiatives and other programs to address the housing crisis.

However, the vacant property tax has faced some criticism. Some argue that the tax may disproportionately affect low-income property owners, that some owners will find ways to avoid the tax, and that it may not effectively address the root causes of the housing crisis in the long term.

Despite the criticism, Toronto's vacant property tax is an important step in addressing the issue of empty homes and buildings in the city. By incentivizing property owners to put their properties back into the housing market, it aims to increase the availability of housing and generate revenue for affordable housing initiatives.

Some important notes to remember:

• The tax rate is 1% of the property's assessed value (CVA) for the first year that the property is vacant. For example, a property valued at $1,000,000 that is vacant for one year would be subject to a tax of $10,000.
• The tax does not apply to properties that are the principal residence of the owner and certain properties that qualify for an exemption.
• Failure to file the declaration by the deadline will result in the property being deemed vacant by the city and the tax will be applied to the property.

As always, it is important to note that vacant property tax laws might change in the future, and it is always best to check with the local authorities or a tax professional for the most up to date information.