Toronto’s New Vacant Home Tax
As you may have heard, the City of Toronto is recommending that City Council move forward with the Vacant Home Tax, with a number of important exemptions. The tax is not yet in effect and specific tax details still require approval by City Council.
Council is currently focused on approving the design details of the tax with the intention to increase the supply of rental housing on the market. The City’s Executive Committee is recommending moving forward with the following key exemptions.
• Principal residence
• Snowbirds
• Rental restrictions
• Death of a registered owner – in year of death and one subsequent year only
• Residential unit undergoing major renovation that makes occupation impossible for a period of 6 months or longer – with permits issued and actively being pursued
• Registered owner is in care, institutionalized or hospitalized – allowable for 2 consecutive years
• Residential unit is subject to a restriction or prohibition on rental – i.e., a condo building with restrictions on allowing condominium units to be made available for rental
• Legal ownership of residential unit has been transferred to an arm’s length transferee – during year of sale only
• Occupancy for full-time employment – the residential unit is occupied by a registered owner with a principal residence outside of a defined Greater Toronto Area and the property is required for employment purposes in Toronto for an aggregate of at least 6 months per year
• Court order is in place prohibiting occupancy of the residential unit
The expected implementation date of the tax is January 1, 2022 and the recommended rate for the tax is 1% of the property’s Current Value Assessment. Under the definition being proposed by the City, a residential unit is “vacant” if it has been unoccupied for more than six months during the prior calendar year or it is deemed to be vacant in accordance with a by-law. It is expected that further public consultations will occur before the tax is implemented. If you have questions about the tax and how it might affect you, please don’t hesitate to give me a call!