Hefty Vacant Home Tax May Catch You By Surprise

Did you know that the Vacant Home Tax is very likely HIGHER than your actual Property Tax? This is why it’s in your best interest to declare your home as NOT vacant so that you can avoid this hefty additional tax that the City of Toronto has just implemented for 2022.

The Vacant Home Tax is taxed at 1.00% of the assessed value by the Municipal Property Assessment Corporation (MPAC). That assessed value is likely a lot less than the market value of your home, but that doesn’t mean the tax is a small amount.

In comparison, the percentage of your property tax in Toronto (which is also based on the MPAC assessed value) is 0.631993%. The Toronto property tax rate is actually the lowest in the Golden Horseshoe!

So how do you avoid paying the Vacant Home Tax? It is a self-declaration that you must submit to the City of Toronto. You will avoid paying the tax if any of the following apply to your Toronto property:

  • You are personally living in the property (i.e., your primary residence);
  • Family or friend(s) live in the property (note that your family or friend must declare the home as their primary residence);
  • The property is occupied by one or more tenants for 6 months or more throughout the year and the lease is for a duration that is over 30 days.

There are a few exceptions for the Vacant Home Tax that I’ll briefly list for you below:

  • Death of an owner;
  • Repairs and renovations (must have permits);
  • Owner is in long-term care;
  • Property is sold, but is vacant before closing (i.e., for long closings);
  • Used for full-time employment; or
  • Court order applies.

Outside of the above exemptions, you will be levied a 1.00% tax against the assessed value of your property.

If your property was vacant and there’s no escaping the tax, then you can pay this tax if your property was vacant via the MyTorontoPay website or via your bank. Essentially this Vacant Home Tax works like a tax filing – you self-declare by the deadline and pay what you owe. Make sure you keep your documents for at least 3 years, in case you are selected for an audit at a later date!

So hopefully now that you are equipped with this knowledge, the Vacant Home Tax will NOT be catching you by surprise if your property was not actually vacant.

Leave a Reply