The New Vacant Home Tax
The City of Toronto and City of Ottawa both passed bylaws to introduce a new tax for vacant homes/units which comes into effect January 1, 2023.
All residential property owners are now required to submit a declaration of their property’s 2022 occupancy status by February 2, 2023 (Toronto) and April 30, 2023 (Ottawa). A declaration is a statement signed by the declarant, the person who authors the declaration, and is used to assert the truth of any fact or facts, or of any account rendered in writing.
The declaration must be completed in full and received by the City of Toronto before the deadline to avoid being issued a fine and having your property deemed vacant. The information provided in the declaration will be reviewed by the Collector of Taxes and as a result, an annual tax will be levied on all Toronto residences that are declared, deemed or determined vacant for more than six months during the previous year, payable beginning in 2023.
A Vacant Home Tax is calculated as 1% of the Current Value Assessment (CVA) and it will be imposed on all Toronto residences that are declared, deemed or determined vacant for more than six months during the previous year. For example, if the CVA of your property is $1,500,000, the tax amount billed would be $15,000 (1% x $1,500,000).
The tax does not apply to:
1) properties that are the principal residence of the owner
2) properties that are the principal residence of a permitted occupant or tenant
3) properties that qualify for an exemption:
a) properties that are the principal residence of the owner properties that are the principal residence of a permitted occupant or tenant properties that qualify for an exemption
b) properties that are the principal residence of the owner properties that are the principal residence of a permitted occupant or tenant properties that qualify for an exemption (under certain conditions)
c) properties that are the principal residence of the owner properties that are the principal residence of a permitted occupant or tenant properties that qualify for an exemption
d) properties that are the principal residence of the owner properties that are the principal residence of a permitted occupant or tenant properties that qualify for an exemption
e) properties that are the principal residence of the owner properties that are the principal residence of a permitted occupant or tenant properties that qualify for an exemption
f) properties that are the principal residence of the owner properties that are the principal residence of a permitted occupant or tenant properties that qualify for an exemption
All residential property owners in Toronto will be required to declare the occupancy status of their property(s) on an annual basis going forward, even if they live there.
In order to file the declaration, you will need the property tax roll number and the customer number found on your property tax statement received in 2022.
The new Vacant Home Tax has also created a positive obligation on purchasers & vendors of real estate. Even though a home may be sold, the vacant home tax declaration will still need to be filed, and if not filed or if the home was vacant in 2022, the Vacant Home Tax will form a lien on the property, and any unpaid amounts will be the purchaser’s responsibility.
For those of you who disagree with the Vacant Home Tax Notice or Supplementary Assessment Notice, you may file a Notice of Complaint to have the City review your property’s status.
I always like to remind my potential clients that they have to consider their own personal details. If you have any questions about this topic, I would love to help!
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
Raluca M. Soica, BBA, CPA, CMA, JD
Barrister & Solicitor
647.280.6497
info@rms-law.ca
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Raluca M. Soica, info@rms-law.ca 1/12/2023 |
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