If you own a home in Toronto, you might be wondering what’s going on with the city’s Vacant Home tax. Tens of thousands of Toronto homeowners have filed complaints and are planning to appeal their 2023 assessments under the tax.
Many homeowners didn’t see the notice to file their Toronto Vacant Home Tax declaration in the mail this year and never filed it. Others declared their homes were occupied by the March 15, 2024 deadline, which should qualify them for a tax exemption—yet they were assessed the tax anyway.
In this article, we’ll break down everything you need to know about Toronto’s Vacant Home Tax, what the City of Toronto is doing to resolve the confusion, and how to file a Vacant Home Tax Notice of Complaint.
If you’ve been assessed for Toronto’s Vacant Home Tax, you can still file a Notice of Complaint.
To file for a tax exemption, you’ll need your tax information and proof that your property was occupied.
Important documents to show for tax exemption include proof of identification listing your address or lease agreements, among other key information.
What’s the Vacant Home Tax?
The Vacant Home Tax is a tax on unoccupied homes that the City of Toronto put in place in 2022 as a way to address the rental housing crisis. It’s goal is to encourage homeowners to rent or sell their vacant homes by charging an annual tax on properties left empty. Properties that are the principal residence of the owner or the principal residence of a permitted occupant or tenant, get an exemption from the tax so long as the residence is occupied for over 6 months out of the year.
Initially set at 1% of the home’s appraised value, Toronto homeowners must annually submit a Vacant Home Tax declaration of occupancy status stating whether the property was occupied for the required length of time. If they do not, the city assumes it was not occupied and levies the tax.
Toronto’s Vacant Home Tax is in addition to the 1% federal Underused Housing Tax that’s levied primarily on foreign nationals who own housing in Canada that is left vacant.
In Toronto, where the assessed value of many homes is over 7 figures, that means that for every $100,000 in home value, a homeowner is charged $1,000; and for every $1 million in home value, they’re charged $10,000.
With the tax set to increase to 3% in 2025, we’ll help you navigate what you need to do this year and next concerning this potential tax levy.
What’s going on with Toronto’s Vacant Home Tax in 2024?
Toronto allowed homeowners to declare their occupancy status starting on December 1, 2023. While the deadline for submitting Vacant Home Tax declarations was originally on February 29, 2024, the City of Toronto decided on March 1 to extend the submission deadline for two weeks until March 15, 2024, after only 63% of declarations were submitted on time.
Unfortunately, many property owners still didn’t submit their declarations by the extended deadline and ended up receiving assessments for thousands of dollars. Some residents also claim they submitted their declarations on time but still were assessed for the tax, despite occupying their home and qualifying for a tax exemption. In total, around 125,000 homeowners received assessments for the Vacant Home Tax this year.
The Toronto Star reported that part of the problem with the tax stems from the decision to require a manual declaration of residency every year. While Vancouver has a similar “empty homes” tax that also requires a manual declaration, their process allows residents to make a late declaration up to 5 months after the filing date. In Toronto, homeowners who missed the deadline must dispute their Vacant Home Tax Notice of Assessment via a Notice of Complaint, a more difficult process.
What’s the City of Toronto doing about Notices of Complaint?
Since the assessments went out, more than 62,000 people have filed a Notice of Complaint disputing the assessed amount. The city says they have already reversed many of the charges on those accounts.
The city is also taking action in other ways by:
Doubling the number of staff who can extend in-person support at City Hall and Civic Centers
Mailing letters to impacted owners to explain the tax to them and clarify that they don’t have to pay it if their property was occupied for more than 6 months in 2023
Updating the Vacant Home Tax page on the City of Toronto website in additional languages
Coordinating with Toronto Revenue Services and 311 to assist residents
The Mayor and members of city council have also declared their intent to pass a motion later this month that will also:
Suspend late fees on taxes that were improperly assessed
Waive the $21 fine for not declaring occupancy status by the deadline
Streamline the complaints process
How to file a Vacant Home Tax Notice of Complaint
If you didn’t submit your declaration on time, you’re not alone. However, it doesn’t mean you have to pay the amount you’ve been assessed for in Toronto’s Vacant Home Tax if your home was occupied in 2023.
Here’s what you should know:
DON’T pay your assessed tax in order to avoid late fees. While the City of Toronto’s website says that 1.25% interest will be charged on the first day you’re in default and then every month after even if it’s later found to have been improperly assessed, Mayor Olivia Chow has announced plans to suspend late fees on improperly assessed Vacant Home Tax amounts.
DO file a Notice of Complaint disputing the amount you’ve been assessed for. It’s easy to do online but you’ll need to have a few pieces of information handy: Your Assessment Roll Number, your Customer Number (both can be found on your property tax statement), and supporting documentation to substantiate your Notice of Complaint.
DO file a Notice of Appeal within 90 days if you disagree with the decision on your Notice of Complaint.
What counts as supporting documentation for a tax exemption
Supporting documentation for the purposes of proving that your property was occupied in 2023 can include documents that have your address on them or otherwise prove that the property is occupied, like:
Ontario vehicle registration
Vehicle insurance documentation
Government-issued personal identification with your address (e.g., driver’s license and Ontario Identity Card)
Income tax notices of assessment
Tenancy agreement(s) for the residential property
Bank statements showing recurring rental income
Copy of death certificate of the registered owner
Employment contracts, pay statements, or records of employment
Homeowner’s insurance certificates
Tenant’s insurance certificates
Court orders prohibiting occupancy of the subject property
Signed letter from a healthcare facility on letterhead, with contact details for the facility
Description of the type of repair or renovation project along with any supporting documents (e.g., work orders, contractor receipts) that prove the occupation and normal use of the property
Copy of any building permits issued to the subject address related to repairs or renovations
What’s next for homeowners
The good news is that the city is expediting most Notices of Complaint to ensure that your tax assessment is corrected quickly. Also, if you’re a foreign national who owns a property in Canada, don’t forget to file your Underused Housing Tax declaration on your Underused Housing Tax return by April 30 each year.
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