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Vacant Home Tax - What Should You Know?

The City of Toronto is imposing a new annual tax on vacant properties starting in 2023. A property is considered vacant if it was unoccupied for six months or more in the previous calendar year. The tax, called the Vacant Home Tax (VHT), aims to encourage homeowners to make their properties available for use and increase the supply of housing in the city of Toronto. Homeowners who choose to keep their properties vacant will be subject to the tax. The revenue collected from the VHT will be used to fund affordable housing initiatives.

Principal residences may be left unoccupied for up to six months without being subject to the tax. The Vacant Home Tax is calculated at a rate of 1% of the property's Current Value Assessment for any periods of vacancy lasting more than six months in the previous year. You are required to declare the status of the property on the annual basis.

How to Calculate Vacant Home Tax?

Let’s say you have a condo and it's currently unoccupied for over 6 months. We have to take into consideration property Current Value Assessment, in our case it is $660,000.

$6600,000 x 1% = $6,600 would be tax in this our case.

The tax is based on the property’s occupancy status for the previous year. For example, if the home is vacant in 2022 the tax will become payable in 2023.

How to Declare Vacant Home Tax?

To make a declaration you will need your 21-digit assessment roll number and customer number from your tax bill or property tax statement. Declarations of occupancy status should be made through the online declaration portal. The whole process takes less then 5 minutes

You may find more information by visiting official Toronto website.

IK Financial Mortgage Team operates on behalf of Mortgage Edge. Lic#10680
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2022-12-28 15:32