Toronto homeowners have until Thursday to declare status of property to avoid steep fines
A new tax on vacant homes is set to take effect in Toronto and homeowners have until this Thursday to declare the status of their properties.
Toronto’s City Council introduced the Vacant Home Tax in a bid to increase housing supply by discouraging homeowners from leaving their properties unoccupied. It went into force last year, making 2022 the first payable year the tax will be levied on vacant homes for one per cent of a property’s Current Value Assessment (CVA).
Lived-in homes won’t be taxed, but all Toronto residential property owners must submit a declaration of their properties’ status by Feb 2 – and those who don’t submit the paperwork could find their homes deemed vacant and pay the price.
POSSIBLE FINES
Penelope Graham, director of content at Ratehub.ca, said homeowners should strive to meet the Feb. 2 deadline in order to avoid steep fines, which range between $250 for failing to submit a declaration to $10,000 for making a false declaration.
“From the homeowners’ perspective, I think awareness is really important because the city is being quite stringent in terms of the fines if you don't comply,” she said in a Monday phone interview with BNNBloomberg.ca.
People who don’t submit a declaration could also be taxed the full portion of the Vacant Home Tax.
Interest will be applied to overdue tax amounts at a rate of 1.25 per cent on the first day after default, and again each month as long as there are unpaid amounts. Toronto said unpaid amounts will be added to property taxes upon default of payment.
WHO IS AFFECTED
Toronto defines a property as vacant if it was not used as a principal residence for the owner or other occupants, or was unoccupied for six months or more during the previous calendar year.
Graham said real estate investors with units sitting empty will likely be among those affected by the tax.
She also advised that home buyers and sellers pay close attention to their closing dates when it comes to the tax.
The seller must complete the tax declaration if the sale closes between Jan. 1 and Feb. 2, and the purchaser must submit a declaration the following year for any closing dates from Feb. 3 until Dec. 31.
However, Toronto said “any unpaid taxes will become the purchaser’s responsibility” and the Vacant Home Tax will form a lien on a property.
EXEMPTIONS
Some vacant homes are exempt from the tax. Those situations include:
- Death of a homeowner
- Principal resident is in a care facility like a hospital or long-term care home
- Court order preventing occupancy
- Owner lives outside the Greater Toronto Area but requires the vacant home for occupation-related residency for at least six months of the year
- Repairs and renovations
- Transfer of legal ownership
Paperwork is required to qualify for an exemption to the tax, and Graham said people with exemptions or those who might fall through the cracks should stay on top of communication with municipal officials.
“It’s really important to be communicating with the city and ensuring you're getting ahead of it,” she said.
HOW TO DECLARE
Homeowners can submit their declaration for the tax online. There is also a paper option, but Graham noted that the city must receive copies by the Feb. 2 deadline.
Toronto said it will issue notices to owners in March and April and payments for the tax will be due on May 1.
WHAT IS THE GOAL
Toronto is the latest Canadian jurisdiction to introduce a tax on vacant homes as the country struggles with a widespread housing shortage.
Vancouver was the first to introduce a tax on vacant homes and said in November it had generated $115.3 million for affordable housing initiatives and renter supports since 2017.
The federal government has also introduced an “Underused Housing Tax” that mostly applies to non-resident homeowners, while other Canadian cities are also considering the measure.
Toronto said revenue from its tax will go towards affordable housing, with a goal to discourage vacant rental units at a time when Canadian renters face the tightest market since 2001, according to a report from the Canada Mortgage and Housing Corporation (CMHC).
Some data from Vancouver suggests the tax nudged some vacant homes back onto the market, with the city reporting that the number of unoccupied properties decreased by 36 per cent between 2017 and 2021.
It remains to be seen how the tax will play out in Toronto, but Graham said it presents an opportunity to understand true number of vacant properties and potentially expand housing supply amid a “crucial shortage” that’s also contributing to the steep cost of real estate.
“Any opportunity to get more data on the true status of the housing market is going to be beneficial,” she said. “Hopefully we'll see some positive benefits … and actually see some of these units returning to either the rental or the ownership market.”
CTVNews.ca Top Stories
Deaths of 4 people on Sask. farm confirmed as murder-suicide
The deaths of four people on a farm near the Saskatchewan village of Neudorf have been confirmed a murder-suicide.
Grandparent scam: London, Ont., senior beats fraudsters not once, but twice
It was a typical Tuesday for Mabel Beharrell, 84, until she got the call that would turn her world upside down. Her teenaged grandson was in trouble and needed her help.
developing Bus plunges off a bridge in South Africa, killing 45 people. An 8-year-old child is only survivor
A bus carrying worshippers headed to an Easter festival plunged off a bridge on a mountain pass and burst into flames in South Africa on Thursday, killing at least 45 people, authorities said.
Calgary bridges remain closed due to ongoing police incident
Calgary police have shut down a number of bridges into and out of the downtown core as officers deal with a distraught individual.
Why some Christians are angry about Trump's 'God Bless the USA' Bible
Former U.S. President Donald Trump is officially selling a copy of the Bible themed to Lee Greenwood’s famous song, 'God Bless the USA.' But the concept of a Bible covered in the American flag has raised concern among religious circles.
George Washington family secrets revealed by DNA from unmarked 19th century graves
Genetic analysis has shed light on a long-standing mystery surrounding the fates of U.S. President George Washington's younger brother Samuel and his kin.
Sunshine list: These were the Ontario public sector's highest earners in 2023
Ontario released its annual sunshine list Thursday afternoon, noting that the largest year-over-year increases were in hospitals, municipalities, and post-secondary sectors.
Kinew, Poilievre meet at Manitoba legislature, discuss each other's priorities
Premier Wab Kinew and federal Conservative Leader Pierre Poilievre met at the Manitoba legislature Thursday afternoon.
'We won't forget': How some Muslims view Poilievre's stance on Israel-Hamas war
A spokesman for a regional Muslim advocacy group says Conservative Leader Pierre Poilievre's stance on the Israel-Hamas war could complicate his party's relationship with Muslim Canadians.