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The real estate industry faced significant challenges last year. As we enter 2024, there’s hope for a better year ahead. As many of us may not want to look back at a year of slowdown, this blog serves as a reminder for all Toronto homeowners to file their Vacant Home Tax Declaration for the previous year timely to avoid fines and penalties. The Declaration can be submitted online by clicking this link.

The deadline to file the Declaration is February 29, 2024. Starting this year, a fee of $21.24 will be charged for failing to submit a Declaration by the deadline. Failure to submit a Declaration by the deadline may also result in an additional fine of $250. Be very careful while determining what to declare (especially if the property is not your primary residence), as a false Declaration can lead to a fine of up to $10,000. 

According to the City’s relevant by-law, a property is considered vacant in the following situations:

• The property was not the principal residence of the owner or any permitted occupants or was not occupied by tenants for a total of six months or more during the calendar year.
• The property was not eligible for an exemption.
• The property was deemed vacant because the owner failed to submit a declaration of occupancy status or any required supporting documentation.

As noted above, failure to submit a Declaration may lead to the tax being levied against the property. Therefore, it is important to file the Declaration for your property in a timely manner.

We are frequently asked by our clients as to what to declare if the property was recently purchased. In the event you purchased the property in the previous year, you can opt for the “Transfer of legal ownership” exemption while filing. If the transaction is closing in 2024, it is highly recommended to obtain a copy of the Declaration from the Seller to ensure it has been filed for 2023. For a detailed discussion about the impact of Vacant Home Tax on real estate transactions, we invite you to read our blog titled “City of Toronto’s Vacant Home Tax: Implications on Real Estate Transactions and How Realtors Can Protect their Purchaser Clients”.

As per our experience addressing the Vacant Home Tax for transactions involving Toronto properties so far, our suggestion would be to ensure you keep a copy of the filed Declaration (for ex., in form of a screenshot) if you are planning to sell the property in near future. This will ensure you have sufficient evidence to satisfy the Buyer and their lawyer that the required Declaration was filed timely. 

We also experienced enquiries from clients who were having trouble filing their Declarations online due to technical difficulties, non-familiarity with technology, etc. The City’s website mentions that the City will be organizing in-person sessions to help property owners with their Declaration in case they are facing difficulties. Following is the schedule posted on the City’s website for the sessions:

• Toronto City Hall – February 5, 7, 28 & 29
• Scarborough Civic Centre – February 5, 7, 28 & 29
• Etobicoke Civic Centre – February 6, 8, 28 & 29
• North York Civic Centre – February 6, 8, 28 & 29
• York Civic Centre – February 5, 7, 26 & 27
• East York Civic Centre – February 6, 8, 26 & 27

It is mentioned that all sessions will take place from 10 a.m. to 3 p.m. near the Inquiry & Payment counters.

The amount of Vacant Home Tax depends upon the Current Value Assessment (CVA) of your property. For the previous taxation year (2023), the amount is 1% of the CVA. For the current taxation year (2024), the amount is increased to 3% of the CVA.  

The Vacant Home Tax can be a hefty amount, and therefore, it is of great importance to keep track of Declarations every year. More information about the Vacant Home Tax, such as exemptions, methods of filing a complaint, etc., can be found here.

If you have any questions or concerns about the Vacant Home Tax or any other matter that requires our assistance such as closing real estate transactions, please feel free to reach out to our office at (905) 270-6660 or through email at info@kormans.ca.

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Yashkaran Singh is an Associate Lawyer at Kormans LLP. You can reach Yashkaran here: ysingh@kormans.ca.

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