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
'A step forward': New screening criteria for sperm donors takes effect
Canadians looking to grow their families with the assistance of sperm or egg donations should soon have more options for donors as the federal health agency does away with longstanding restrictions criticized as discriminatory.
What is whooping cough and should Canadians be concerned as Europe declares outbreak?
There is currently a whooping cough epidemic in Europe, with 10 times as many cases compared to the previous two years. While an outbreak has not been declared nationwide in Canada, whooping cough is regularly detected in the country.
Ontario Provincial Police arrest 64 suspects in child sexual exploitation investigation
Ontario Provincial Police say 64 suspects are facing a combined 348 charges in connection with a series of child sexual exploitation investigations that spanned the province.
'Summer of discontent': Federal unions vow to fight new 3-day a week office mandate
Federal unions are launching legal challenges and encouraging public sector workers to file "tens of thousands" of grievances over the new mandate requiring federal workers to return to the office at least three days a week in the fall.
Pfizer agrees to settle more than 10K lawsuits over Zantac cancer risk: Bloomberg News
Pfizer has agreed to settle more than 10,000 lawsuits about cancer risks related to the now discontinued heartburn drug Zantac, Bloomberg News reported on Wednesday, citing people familiar with the deal.
Watch fighter jet pilots pummel fake enemy ship off coast of Philippines
The United States and Philippines held annual joint-training drills just off the Southeast Asian nation’s western coast on Wednesday. Military forces sunk a 'mock' enemy warship – the BRP Lake Caliraya, which was a decommissioned tanker made in China.
U.S. presidential candidate RFK Jr. had a brain worm, has recovered, campaign says
Independent U.S. presidential candidate Robert F. Kennedy Jr. had a parasite in his head more than a decade ago, but has fully recovered, his campaign said, after the New York Times reported about the ailment.
'Ozempic babies': Reports of surprise pregnancies raise new questions about weight loss drugs
Numerous women have shared stories of 'Ozempic babies' on social media. But the joy some experience in discovering pregnancies may come with anxiety about the unknowns.
Rookie goalie Arturs Silovs to start for Canucks in Game 1 vs. Oilers
Rookie goalie Arturs Silovs will start in net for the Canucks as Vancouver kicks off a second-round series against the Edmonton Oilers Wednesday night.