This April, the vacant home tax was a very hot topic in Ontario with cities like Hamilton and Sault Saint Marie adopting the measure to tackle local housing availability and affordability. But it was an especially sensitive subject in Toronto, with tens of thousands of homeowners being forced to contest bills after neglecting to declare whether their homes were vacant. This was an error in judgement made even more painful following the City’s recent decision to hike the rate from 1% to 3% of a home’s current assessed value.   

So, as a public service and to help avoid future confusion, please note the following IMPORTANT information. All Toronto residential property owners are required to submit a declaration of their property’s occupancy as of February of the following year.

I think one of the big misunderstandings is that people thought they didn’t have to submit it every year. For instance, if you are a landlord with a long-term tenant, and you took care of it last year in February, you may have thought that you didn’t need to submit again this February. If you’ve got a long-term tenant, of course the home is going to be utilized. Unfortunately, this is not the case. You must submit it every single year.

1. Filling in the form will allow the City to determine whether a residential property was vacant or unoccupied for more than 6 months in the previous year. Properties that were vacant for more than 6 months, and that are not the owner’s principal residence, are subject to vacant home tax.
2. Properties for which no declaration is received are also subject to the tax.

Let’s consider these last two points. If it’s your own home, where you and your family live, you are okay. You will not have to pay the vacant home tax. Even if you decide to go on a sabbatical to Europe for a year and not rent your home, you are exempt from the tax, but you are not exempt from filling out the form.

It is the act of not filing that will trigger a tax bill on a homeowner’s principal residence. So, always be aware of the February deadline. It will save yourself time, aggravation, and potentially a very hefty tax bill.

For more on the City of Toronto’s Vacant Home Tax and to learn how to file or appeal an audit, go to:

https://www.toronto.ca/services-payments/property-taxes-utilities/vacant-home-tax/