On July 15, 2021, Toronto City Council approved a plan for implementing a new tax on the city’s vacant homes beginning in 2022. The proposed tax appears to be very similar to the “empty homes tax” already in force in the City of Vancouver.
According to a News Release issued yesterday, a home will be considered vacant if it has been unoccupied for more than six months during the previous calendar year, or if it is deemed to be vacant. Limited exceptions will apply to situations including the death of the owner, homes under renovation, “snowbirds”, or if the owner is in medical care. The tax rate will initially be set at 1% of the property’s current value assessment for the year in which the home is vacant. Property owners will be required to make a declaration each year regarding the status of their residential home which may be subject to an audit. The new tax will also include provisions relating to penalties for failure to pay, fines for various offences and a dispute resolution process.
The first tax reference year will be 2022, such that the tax will become payable for the first time in early 2023. While no legislation has been released to date, a by-law is expected to be prepared for Toronto City Council’s review by the end of 2021.