January 24, 2023
As you may be aware, the Toronto Vacant Home Tax Bylaw was enacted in 2022. It requires that property owners declare, on an annual basis, the occupancy status of Toronto residential properties owned. A Vacant Property will be subject to the Vacant Home Tax at a rate of 1% of the property’s value assessment. The Vacant Home Tax also applies if you fail to file the declaration. Penalties from $250 up to $10,000 may apply for late filing.
The Vacant Home Tax only applies to residential properties. A residential property will be considered a Vacant Property (and therefore subject to the Vacant Home Tax) if either of these situations apply:
- the property is not used as a principal residence by an owner or other occupant (i.e. family member, friend, etc.) for at least six months in any year.
- the property is not used by one or more Tenants for residential purposes for at least six months in any year.
To qualify as a Tenant, there must be a written lease/sublease for a consecutive rental term of at least 30 days. Also notable is that a person may have only one principal residence, but a residential property may be the principal residence of more than one person.
We are writing to remind you to file your declaration for 2022 that was mailed to residents of Toronto in November 2022. The form is due February 2, 2023. The form and an overview of the definitions can be found at the attached link: https://www.toronto.ca/services-payments/property-taxes-utilities/vacant-home-tax/
A similar Vacant Unit Tax was implemented for residential properties in the City of Ottawa, with the declaration filing deadline of March 16, 2023. The form and an overview of the definitions can be found at the attached link: https://ottawa.ca/en/living-ottawa/taxes/property-taxes/vacant-unit-tax
If you require assistance in determining the status of a particular residential property, please do not hesitate to contact us.
Miller Bernstein LLP