Toronto's New Vacant Home Tax: A Game-Changer in Solving the Housing Crisis
Are you planning on owning a property in Toronto? The new Toronto Vacant Home Tax (VHT) has been introduced to address the city's ongoing housing crisis.
This is exciting news for anyone who cares about the availability of housing in Toronto, especially in areas where demand exceeds supply. The VHT is an annual tax that aims to increase the supply of housing in the city by encouraging owners to put their vacant residential properties on the market. All residential property owners in Toronto, whether they reside in the property or not, are required to submit an annual declaration of their property's occupancy status for the previous year. Even if you live in your property, you must declare that it is not vacant, and the declaration should include the info for the previous year. If you fail to submit the declaration by the February 2, 2023 deadline, you may be subject to additional tax or penalties.
If a property is deemed vacant for more than six months in the previous year, the owner will be liable to pay a Vacant Home Tax of one percent of the Current Value Assessment (CVA). The revenue collected from this tax will be allocated towards affordable housing initiatives, making this not only an effort to increase the supply of housing in Toronto, but also a means to provide financial support for affordable housing in the city.
While the VHT may seem like an additional burden to property owners, it is important to remember that the revenues collected will be used to support affordable housing initiatives, which will benefit the city and its residents in the long run. Additionally, the VHT will encourage owners to put their vacant properties on the market, thereby increasing the availability of housing in the city.
To make a declaration, property owners will need their 21-digit assessment roll number and customer number which appears on their tax bill or property tax account statement. Declarations can be made on paper or through the City's secure online declaration portal, which will open in mid-December 2022. It is critical to take a screenshot once submitting to have a copy of the declaration. If you prefer a paper declaration form, you can contact 311 to receive one. It is very important to make sure the paper form is completed in full and submitted before the deadline to avoid fines and having your property deemed vacant. In the case of your property being subject to the tax, you will receive a Vacant Home Tax Notice in March or April, with payment due on May 1. If you wish to dispute the notice, you may file a Notice of Complaint through the online portal. Just be aware that failure to declare or making a false declaration may result in a fine ranging from $250 to $10,000.
The implementation of this new tax is expected to have a significant impact on the housing market and housing affordability in Toronto, making it a topic of interest and concern for property owners and residents alike. This fact should be considered while purchasing a property in the City of Toronto. As a property owner in Toronto, it is important to make sure to keep up with the latest information about the VHT and how it may affect you.
These are just a few examples of the legal matters to remember when navigating the real estate world. By involving legal counsel throughout the process, you can help secure a successful and legally compliant purchase or sale. At Buzaker Law Firm, we value your business and work to give you the peace of mind you need to make your real estate transactions a success.
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This material is for informational purposes only and should not be relied upon as legal advice. To book a consultation with the Buzaker Law Firm’s team member regarding opening, expanding or running your business in Ontario, email us at info@vblegal.ca or call (905) 370-0484