The Vacant Home Tax (VHT) in the City of Toronto was introduced as a tool to encourage property owners to either occupy, rent out or sell homes that would otherwise sit empty. According to the City’s website, it is intended to:
- Help increase housing supply by identifying and discouraging properties that are unoccupied for more than six months during a calendar year.
- Generate revenues from the tax for funding affordable-housing initiatives (for example the City’s “HousingTO Plan” and the “Multi-Unit Residential Acquisition (MURA)” program).
- Require every residential property owner to submit a declaration of occupancy status each year—even if the property is their principal residence.
In plain terms: if you own a house or condo in Toronto, you may need to tell the City each year whether it was occupied (you lived there, or someone lived there) or vacant (no one lived there for six + months) or qualifies for one of the exemptions. If declared or deemed vacant, you could owe tax equal to a percentage of the assessed value of the home.
Recent News & Key Updates (last month)
Here are the notable recent items of news and change—good to know whether you own property or are watching how the City is using this policy.
1. Program redesign announced
The City has acknowledged that the rollout of the VHT program had “significant challenges” and staff have committed to a redesign. Key points include:
- The declaration window has been extended and revamped: for the 2024 taxation year, the declaration period runs from November 1, 2024 to April 30, 2025.
- The tax rate has increased: for the 2024 taxation year the rate jumps from 1 % to 3 % of a property’s current value assessment (CVA) if vacant.
- New portal/interface improvements: it’s now easier to declare online, you can receive email confirmation, phone support in 180 languages.
- The City is shifting billing timelines to align with the new declaration period and ensure fewer surprises. For example, bills for 2024 are due in instalments starting September 15, October 15, November 17, 2025.
2. Revenue and vacancy estimates
The staff reports suggest that increasing the rate to 3% could generate approximately $105 million in 2025, though this depends heavily on how many homes remain vacant.The vacancy rate in Toronto is estimated by the City to be between 1.0 % and 1.2 % of residential properties.
A recent report noted that as of August of the year in question, 2,161 homes were reported as vacant by owners and another 17,437 homes were deemed vacant by the City after notices went unchallenged.
3. Complaints, scrutiny and calls for reform
There has been push-back. For example, the Canadian Taxpayers Federation called for the tax to be scrapped, arguing that tens of thousands of homeowners were wrongly billed. This is part of what triggered the redesign noted above.
Also, a staff background report from September 2024 noted that the program is still young and they are monitoring for unintended consequences.
4. Reminder to property owners
The City recently reminded property owners that the deadline for submitting a declaration of occupancy status is coming up (April 30, 2025) for the 2024 taxation year. As of March 31, the City had received 94.5 % of all the expected declarations (789,023).
What This Means for You (Homeowner Perspective)
If you own a residential property in Toronto (house, condo, duplex etc) the VHT can affect you in several ways:
- If you live in the property as your principal residence, you should declare it as “occupied” and in most cases you will not pay the tax. One of the key criteria is that the property must be your principal residence for at least six months of the taxation year.
- If you rent it out (tenant lives there 6+ months) or someone else occupies it as their principal residence, then again you likely can declare “occupied” and avoid the tax.
- If the property is vacant for six months or more in the calendar year, and you don’t qualify for an exemption, you could receive a VHT Notice and owe tax of 3% of the property’s current value assessment for 2024. (Earlier years had 1%.)
- If you don’t submit your declaration by deadline, the City will treat the property as vacant and you’ll receive a Notice of Assessment accordingly.
- If you’re buying/selling a property, the obligation and risk transfers with the property. The tax “runs with the land.” It’s wise to check with vendor/purchaser that declarations have been made.
- If you think a bill is wrong, you can dispute it. The City provides a “Notice of Complaint” option, and you’ll need to submit supporting documentation.
Frequently Asked Questions (FAQ)
Here are some of the most common questions people have, with answers that aim to be clear and practical.
Q: Do I have to declare even if I live in the property?
A: Yes. Every residential property owner (in the relevant tax class) must make an annual declaration about occupancy status—even if the home is your principal residence. If you don’t, the City assumes it’s vacant.
Q: What is the “six-month” occupancy threshold?
A: A property is considered “occupied” if the owner or someone they permit lives there as their principal residence for at least six months in the taxation year. If not, and no exemption applies, the home may be considered vacant.
Q: What if the property was listed for sale during the year? Is it exempt?
A: There is a transfer-of-ownership exemption: if you bought the property and the closing date was in the taxation year being declared, and the unit was offered for sale, you may qualify. But it’s not automatic and you must meet the conditions.
Q: How much is the tax?
A: For the 2024 taxation year, the tax rate is 3% of the property’s current value assessment if deemed vacant. Previously (in earlier years) it was 1%.
Q: When do I submit my declaration?
A: For 2024 tax year, the declaration window is November 1, 2024 through April 30, 2025. It’s important to meet the deadline to avoid automatic vacancy classification.
Q: What if I miss the deadline?
A: If you don’t declare by the deadline, the property is assumed vacant and you may receive a Notice of Assessment for the tax. Then you’ll have to file a complaint if you believe it’s wrong.
Q: What exemptions exist?
A: Some common exemptions include: the homeowner died (for up to 3 years), the principal resident is in hospital/care (for up to 2 years), the property is undergoing major renovations (with permits) preventing occupancy for six months, etc.
Q: Can I challenge a bill?
A: Yes. The City allows you to submit a Notice of Complaint. If your property was occupied or qualifies for an exemption, you should gather relevant proof (lease, ID, insurance, permits etc.) and submit.
Q: Does this tax apply to all homes?
A: No. Only residential properties in the municipal residential tax class. Newly constructed homes not yet assessed, commercial, industrial, or multi-residential fully assessed properties (with separate roll numbers) may be excluded.
Final Thoughts & Tips
- If you own one or more properties in Toronto, mark the declaration deadline (April 30, 2025 for the 2024 year) in your calendar – and file early to avoid surprises.
- Keep records: lease agreements, occupancy documents, insurance, bills, correspondence all help if you need to dispute a classification.
- If you’re buying a property, check with your lawyer/agent: ask for proof that the vendor has submitted the necessary occupancy declaration(s), and that there are no unpaid VHT bills attached.
- For properties potentially vacant: maybe consider converting to a rental, listing for sale, or other occupancy strategy—because 3% of a high-value home is a meaningful cost.
- For those feeling frustrated: the City has acknowledged issues and is in redesign mode to improve communication and processes. So while the tax may feel new or burdensome, it is also evolving.
- Finally—and humanly speaking—this is part of Toronto’s broader housing affordability and supply challenge. The tax is an attempt to nudge better utilization of existing homes. As homeowners, keeping on top of the compliance side is wise; as community members we might reflect on how policy, housing supply, and individual property decisions tie together.