City Council approves plan for a tax on vacant homes in Toronto

TORONTO, ON., Dec. 17, 2020 — Toronto City Council announced today that it has approved an implementation plan to introduce a new tax on vacant Toronto homes starting in 2022.

The City says the aim of this vacant home is to increase housing availability by encouraging homeowners to sell or rent their unoccupied home – and, if they choose to continue to keep the home vacant, the revenue from the tax they will be levied could be used to fund more affordable housing projects.

Taking a cue from Vancouver’s implementation of a vacant home tax as an example, the City says according to their data, if one per cent of Toronto’s housing stock is vacant, at a tax rate of one per cent on the average Toronto home’s current assessed value, this could equal $55 million to $66 million in tax revenue per year. The City has yet to announce Toronto’s vacant homes tax rate and they say it will be “determined in the tax development process.”

“The vacant home tax will increase the housing supply in Toronto. This will help open up the housing and rental market,” said Mayor John Tory. “The vast majority of Toronto residents will not pay this tax but our entire city will benefit from more housing and more affordable housing. City staff will now do the work to make sure this is implemented in the right way.”

The City did say that residential property owners would be required to make a declaration each year about the occupancy status of the home.

“I have advocated for a Vacant Homes Tax for some time and I am pleased that we are moving forward with this measure,” said Deputy Mayor Ana Bailᾶo (Davenport), Chair of the Planning and Housing Committee. “The primary goal of a Vacant Homes Tax is to increase housing supply by making vacant homes available for rent or sale which means people will actually live in them. If owners don’t want to rent or sell their properties, the Vacant Homes Tax means they will contribute to our City’s investment in affordable housing,” said Bailᾶo.

The City also says “staff will report back to Council later in 2021 on how the tax will be implemented, as time will be needed to develop the technology, a public awareness campaign, exemptions, administrative and enforcement functions.”

SOURCE City of Toronto

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