The Toronto Vacant Home Tax (VHT), implemented in 2022, is a policy aimed at addressing housing shortages by discouraging homeowners from leaving residential properties unoccupied. Here’s a detailed overview:
Key Features:
- Tax Rate:
- 1% of the property’s Current Value Assessment (CVA) annually. For example, a home valued at 1 millionwouldincura 10,000 tax if vacant.
- Declaration Requirement:
- Mandatory annual declaration by all residential property owners, regardless of occupancy status. Declarations are submitted between February 1 and March 15 each year.
- Failure to declare results in the property being automatically deemed vacant, triggering the tax.
- Definition of Vacancy:
- A property is considered vacant if it is unoccupied for more than six months in a calendar year, excluding permissible exemptions.
- Exemptions:
- Renovations/Construction: Permits required, making the property legally uninhabitable.
- Owner’s Death or Hospitalization: Up to one year following death or illness.
- Legal Restrictions: Court orders or zoning issues preventing occupancy.
- Primary Resident in Care: Owner is in a hospital, long-term care, or supportive living facility.
- Transfer of Ownership: Properties sold or newly purchased within the year.
- Enforcement & Penalties:
- Late declarations incur a $250 fine.
- False declarations may result in fines of 250–250–10,000.
- Tax arrears accrue interest and may become a lien on the property.
- Revenue Use:
- Funds are directed toward affordable housing initiatives to further address housing accessibility in Toronto.
Purpose:
- Increase Housing Supply: Encourage owners to rent or sell vacant properties.
- Mitigate Housing Crisis: Reduce speculative investment and underutilized housing.
- Generate Funding: Support affordable housing projects through tax revenues.
Impact:
- Similar taxes in cities like Vancouver have reduced vacancy rates. Toronto anticipates increased housing availability and market stabilization, though long-term effects are still being assessed.
Compliance Checks:
- The city may audit declarations and request evidence (e.g., utility bills, tenant leases) to verify occupancy.
This tax reflects Toronto’s proactive approach to leveraging fiscal policy to tackle urban housing challenges, balancing penalties with reasonable exemptions to ensure fairness.
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