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Toronto’s Vacancy Tax

View of the Toronto skyline

Toronto’s vacancy tax rate for homeowners came in effect as of Jan 1st, 2023. It is based on the property’s occupancy status from the previous year, in this case 2022.  Property owners need to submit before the deadline of February 2nd an online declaration of their properties occupancy status, failure to do so may result in fines up to $10,000 and/or in addition 1% of the home’s assessed value must be paid if it was vacant in 2022.  

People have raised issues with this tax for several reasons.  It’s not clear to property owners whether fines and penalties will be imposed automatically by adding it to yearly tax bills or if it will be considered a bylaw infraction like a parking ticket.  When submitting the declaration you are required to show documents proving it wasn’t vacant and some property owners don’t have formal leases drafted for friends and family. Co-operative/co-ownership properties receive one tax bill rather than an individual units, and also there is no mention of exemptions for short term rental properties like Airbnb.

(Advice: always have a formal lease drafted, even with family).

Some properties that are exempt are as follows:

  • The property was vacant due to the homeowner’s death
  • The property was undergoing extensive repairs and/or renovations that prevent everyday use
  • The property was vacant due to the homeowner being in the hospital, longterm care or support facility for at least six months but only a maximum of 2 years
  • The purpose of the property was for required for occupation for employment for at least 6 months and the owner lives elsewhere
  • The property is a principal residence for snowbirds, students that study/travel abroad for en extended period of time

To combat the housing crisis the government implemented the Foreign buyer ban but some would argue that there are less foreign buyer owned homes in Canada than Canadian residents who own multiple properties. We will see if both the foreign buyer ban and the vacant tax rate will make a change to the housing market and for those with multiple properties in Toronto apply for the declaration.

For online declaration:

For more help on multiple property ownership or leases click here: