Vacant Home Tax - City of Toronto & Ottawa

Effective January 1, 2023, home owners in Toronto need to declare the status of their property annually for the previous year.

The goal for this tax is to increase housing supply, and push all the vacant and short term rentals to become long term rentals. But if you choose to leave it vacant, or use it for "AirBnB", you just need to pay tax.

Tax: 1% of the property's Current Value Assessment, and it will be added to the property tax bill. The assessment value is usually lower than the market value. For example, if your home assessment value is $450,000, then the Vacant Tax will be $4,500 for that year.

These 3 scenarios are deemed property NOT vacant, and vacant tax won't apply:

1. Owner Occupied: for self use and can have 1 principal home per year

2. Permitted Occupant: no payment of rent, such as friend, relative must be used for residential purposes and must be their principal residence or at least 6 months

3. Tenant: with a lease of no less than 30 days, you can have multiple lease agreements which must in total be more than 6 months. It doesn't necessarily need to be their principal home

Some exemptions:

1. Owner has died

2. Major repairs and renovations that's necessary to take longer than 6 months

3. Owner of the property is away for long term care or hospitalization, up to 2 years

4. You have purchased the property in the previous year. Then both the seller and buyer are exempt from the vacant tax

5. Owner is living outside of GTA for full time work for more than 6 months. It requires proof of residency outside of GTA and copy of employment contract

6. By court order the property needs to be vacant

Ottawa is implementing the same tax, and York Region is considering the similar. It may come in effect in 2024.