The Toronto Vacant Home Tax is an annual municipal tax levied on residential properties that are unoccupied for more than six months in a calendar year. The tax rate is 3% of the property's Current Value Assessment, a significant increase from the initial 1% rate. Every owner of a residential property in Toronto must file an annual declaration of occupancy status, even if they live in the home, with failure to declare resulting in the property being deemed vacant and taxed. The tax is designed to increase the housing supply by encouraging owners to rent or sell vacant properties, with revenue directed to affordable housing initiatives.
What is the Toronto Vacant Home Tax and Who Must Declare
The Toronto Vacant Home Tax is a municipal tax separate from federal taxes like the Underused Housing Tax. It applies to residential properties within the City of Toronto that are vacant for more than six months, or 184 days, during a calendar year. The tax was introduced under the HousingTO 2020 to 2030 Action Plan with the goal of discouraging property speculation and increasing the housing supply. Every owner of a residential property in Toronto is legally required to submit an annual declaration of the property's occupancy status for the previous year. This requirement applies universally, regardless of whether the owner lives in the property, rents it out, or leaves it vacant. The declaration is the primary mechanism the City uses to determine tax liability, and it must be filed even if the owner believes an exemption applies. The declaration period opens each November, and the deadline for submission is April 30 of the following year. For example, the declaration for the 2025 occupancy year was due by April 30, 2026.
Calculating the Tax and Recent Rate Changes
The Vacant Home Tax is calculated as a percentage of the property's Current Value Assessment, which is the assessed value determined by the Municipal Property Assessment Corporation for property tax purposes. The tax rate has not remained static since the program's inception. When the tax launched for the 2022 taxation year, the rate was set at 1% of the CVA. This rate was tripled to 3% effective for the 2024 taxation year, and it remains at 3% for the 2025 tax year. This change represents a significant financial increase for affected property owners. On a property with a CVA of $1,000,000, the annual tax liability rose from $10,000 to $30,000. For a property assessed at $1,500,000, the tax is $45,000 annually. The tax is levied on top of regular municipal property taxes and forms a lien on the property, meaning any unpaid amount becomes the responsibility of a new owner if the property is sold.
Key Dates and the Mandatory Declaration Process
The Vacant Home Tax program operates on a strict annual timeline that all property owners must follow. The declaration window for stating a property's occupancy status for the previous calendar year opens each November. The absolute deadline to submit this declaration is April 30 of the following year. For instance, the declaration for occupancy in 2025 was due by April 30, 2026. After the declaration deadline passes, the City processes the information and issues Vacant Home Tax Notices of Assessment in June to owners of properties deemed vacant. The tax itself is then payable in three equal instalments later that year. For the 2025 tax year, the payment instalments were due on September 15, October 15, and November 16 of 2026. The declaration must be filed by the property owner or an authorized representative acting on their behalf. To file, you need your 21-digit assessment roll number and customer number, which are found on your property tax bill, account statement, or a Vacant Home Tax notice. The declaration can be submitted online through the City's portal or via a paper form submitted by mail or in person. If a declaration is not received by the April 30 deadline, the City will deem the property vacant for that year and issue a tax bill automatically, with no further warning.
The consequences of missing the declaration or providing false information are severe and include the following key points. Failing to submit any declaration by the deadline results in the property being automatically deemed vacant, triggering the full 3% tax assessment. There is no simple late-filing fee. The penalty is the tax itself. Making a false declaration regarding occupancy status, or failing to provide requested information during an audit, can result in a fine of up to $10,000 in addition to the tax owed. The City conducts audits on declarations, and as of 2026, it has the authority to audit declarations made for the 2023 and 2024 tax years. Property owners are legally required to retain all records and documents pertaining to the occupation of the property or any exemption claimed for a period of at least three years to support their declaration if audited.
Exemptions from the Vacant Home Tax
A residential property that is physically vacant for more than six months may still be exempt from the tax if it meets specific criteria outlined by the City. It is crucial to understand that exemptions are not granted automatically. The property owner must actively declare the property's status and claim the applicable exemption, and they must be prepared to provide supporting documentation if requested. The principal residence exemption is the most common. A property is exempt if it is the principal residence of the owner for at least six months of the year. This status is maintained even if the owner is temporarily away for reasons such as travel, work, or medical care, including snowbirds who spend extended time outside Canada. An owner can only claim one property as their principal residence for the tax year. Other exemptions apply in specific circumstances where the vacancy is due to certain life events or practical necessities.
- Principal Residence: The property serves as the owner's principal residence.
- Death of an Owner: The vacancy follows the death of a registered owner.
- Repairs or Renovations: The property is vacant due to major repairs or renovations, provided permits were obtained if required and the work is ongoing.
- Transfer of Legal Ownership: The property was sold during the year.
- Occupancy for Full-Time Employment: The owner is required to live elsewhere for work.
- Court Order: Occupancy is prevented by a court order.
- Hospitalization or Long-Term Care: The owner is in a hospital, long-term care, or supportive care facility.
For any exemption claimed, owners must keep relevant documentation for the mandatory three-year record retention period. This documentation can include proof of principal residence, copies of building permits, death certificates, or sale agreements. If the City selects a property for an audit, the owner will be contacted by mail and has 60 days to submit the requested supporting documents through a secure online portal. The owner should submit only copies of the requested information. Original documents provided may be retained by the City in accordance with the Toronto Municipal Code.
Disputing a Tax Assessment and the Appeals Process
If a property owner receives a Vacant Home Tax Notice of Assessment and disagrees with the City's determination that the property was vacant, they have a formal process to dispute the bill. The first step is to submit a Notice of Complaint to the City. The deadline to dispute a bill for a given tax year is specific. For the 2025 tax year, the deadline to file a Notice of Complaint is December 31, 2026. If the disputed bill is a Supplementary Notice of Assessment resulting from an audit, the Notice of Complaint must be submitted within 90 days of the date shown on that bill. Once a Notice of Complaint is filed, the City will review the case. If the owner disagrees with the decision stated in the resulting Notice of Complaint, they may file a further appeal. This appeal must be submitted within 90 days of the date of the City's decision on the initial complaint. The appeal is heard in writing by the City's Deputy Treasurer, who serves as the Appellate Authority. A written hearing means there is no in-person meeting. The owner must submit all required documents and evidence to support their case in writing. Once an appeal request is received, the written hearing is scheduled to occur within 90 days, and a decision letter is issued within 30 days of the decision being made. The decision of the Appellate Authority is final and cannot be appealed further within the municipal system.
Property Sales, Audits, and Compliance Requirements
When a property subject to the Vacant Home Tax is sold, responsibility for the tax depends on the timing of the sale. The Vacant Home Tax forms a lien on the property, so any unpaid tax becomes the legal responsibility of the new owner upon purchase. The vendor is responsible for submitting the occupancy status declaration for the portion of the year they owned the property and must provide the purchaser with a statutory declaration concerning the property's occupancy status. The purchaser must then submit their own declaration for the property the following year. Typically, the purchaser will qualify for an exemption under the "transfer of legal ownership" rule for the year of purchase if the property is vacant. The City has an active audit program to ensure compliance. If a property is selected for audit, the owner will be contacted by mail and may be required to submit further information and evidence to support their declared occupancy status or exemption claim. Owners have 60 days from the date of the audit letter to submit the requested documentation through the City's secure portal. It is important to submit only copies of the requested documents, as original documents provided may be retained by the City. After an audit is complete, the owner is notified by mail of the outcome. If the audit determines the property was vacant, a Supplementary Vacant Home Tax Notice of Assessment will be issued, which can itself be disputed through the Notice of Complaint process.
How the Vacant Home Tax Differs from Other Housing Taxes
It is important for property owners to distinguish the Toronto Vacant Home Tax from other housing-related taxes in Canada, as they are separate regimes with different rules. The Toronto VHT is a municipal tax administered solely by the City of Toronto. It applies broadly to all owners of residential property in Toronto, regardless of their citizenship or residency status. Its sole trigger is a property being vacant for more than six months in a year. In contrast, the federal Underused Housing Tax is administered by the Canada Revenue Agency and applies to residential property across Canada owned by non-resident, non-Canadian individuals and certain Canadian corporations. The UHT has its own declaration requirements, exemptions, and tax calculation, which are entirely separate from the Toronto VHT. Furthermore, Ontario's vacant home taxes, including Toronto's, differ from British Columbia's Speculation and Vacancy Tax in their structure and application. Ontario's taxes apply broadly to owners with fewer relief provisions, whereas the BC SVT has specific exclusions for Canadian citizens and permanent residents. A Toronto property owner may be required to comply with both the municipal VHT and the federal UHT if they are subject to both, meaning they must file two separate declarations to two different government bodies.
Frequently asked questions
What happens if I forget to file my Vacant Home Tax declaration?
If you fail to submit your annual occupancy declaration by the April 30 deadline, the City of Toronto will automatically deem your property vacant for that taxation year. This triggers a Vacant Home Tax assessment at the full rate of 3% of your property's Current Value Assessment. You will receive a tax bill, and there is no automatic late-filing option to simply correct the omission without penalty. The penalty is the tax itself. You would then need to follow the formal dispute process by filing a Notice of Complaint to prove the property was actually occupied.
I am a snowbird and live in my Toronto home for only 5 months a year. Do I owe the tax?
Not necessarily, if the Toronto property remains your principal residence. The principal residence exemption applies if the property is your main home, even if you are temporarily away for travel, work, or other reasons like being a snowbird. You would declare the property as occupied (as your principal residence) on your annual declaration. The key is that you can only have one principal residence for the tax year. You must maintain and be prepared to provide documentation, such as government mail or utility bills, linking you to that address as your principal residence.
My property was vacant because it was being renovated. Is it exempt?
Yes, a property vacant due to major repairs or renovations may be exempt from the Vacant Home Tax. To qualify, you must declare the property as vacant but claim the exemption. You should be prepared to provide supporting documentation if audited, such as copies of building permits related to the work and evidence that the renovations were actively ongoing during the period of vacancy. The exemption is not automatic, so you must actively claim it on your declaration.
How is the Vacant Home Tax different from the federal Underused Housing Tax?
The Toronto Vacant Home Tax is a municipal tax run by the City of Toronto that applies to all residential properties in Toronto left vacant for over six months. The federal Underused Housing Tax is administered by the Canada Revenue Agency and applies nationally to residential property owned by non-resident, non-Canadian individuals and certain Canadian corporations. They have separate declaration forms, deadlines, tax rates, and exemption criteria. A property owner in Toronto may need to comply with both taxes if they fall under both sets of rules.
What documents do I need to keep for the Vacant Home Tax?
You are required to retain all records and documents pertaining to the occupation of your residential property or any exemption claimed for a period of no less than three years. This includes documents like proof of principal residence, tenancy agreements, death certificates, building permits, or sale agreements. These records must be available to submit if your property is selected for an audit by the City. Supporting documentation must be relevant to the applicable taxation year.
Can I appeal a Vacant Home Tax bill?
Yes, you can dispute a Vacant Home Tax bill by submitting a Notice of Complaint to the City. For a standard Notice of Assessment, there is a set deadline, such as December 31, 2026, for the 2025 tax year. If you disagree with the City's decision on your complaint, you may file a further appeal within 90 days of that decision. The appeal is a written hearing conducted by the City's Deputy Treasurer, whose decision is final.
Sources and further reading
- Vacant Home Tax toronto.ca
- A Tax Lawyer's Guide to the Toronto Vacant Home Tax taxpage.com
- What You Need to Know About the Toronto Vacant Home ... sbpartners.ca
- Toronto Vacant Home Tax Calculator 2026 wowa.ca
- What you should know about the Toronto Vacant Home Tax ownright.com
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.