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What Is the Toronto Vacant Home Tax? Simple Guide for Property Owners

Toronto Vacant Home Tax

The housing market in Toronto has been known for its own challenges. The demand for housing and the shortage thereof have been among the toughest challenges the city has faced. To address this, Toronto has introduced a new concept.

Unique and innovative, this new concept levies the Toronto Vacant Home Tax on residents who keep their residential properties vacant. More than a revenue stream for the local body, the tax aims to push more units into rental or sale.  

This guide helps you break down everything that property owners need to understand about the VHT, from declarations to penalties.

What Is the Toronto Vacant Home Tax?

The Toronto Vacant Home Tax is an annual municipal tax targeting residential properties left vacant for more than six months in a calendar year. The tax was introduced in 2022 and requires every property owner to declare the status of the occupancy status of their properties every year. 

Revenue from this tax is used to fund affordable housing initiatives under the city’s HousingTO 2020–2030 Action Plan. A property will qualify as vacant if it remains unoccupied for more than 184 days (six months) in total, excluding brief periods under exemptions. Owners should file declarations for the previous calendar year. 

If any properties are not declared, they will be automatically considered vacant, and appropriate taxes will be levied on them. The taxation is similar to the tax levied in Ottawa. These taxes are intended to boost housing availability in high-demand areas.

Vacant Home Tax Calculation

The VHT or Vacant Home Tax is calculated as a percentage of the property’s Current Value Assessment (CVA). The CVA is set by the Municipal Property Assessment Corporation (MPAC).  

The rate is 3% of CVA in 2026, up from 1% in 2022-23. The formula used for the calculation is quite easy and simple. 

VHT=CVA×0.03

Let us say you have an unoccupied home with a CVA of $1,200,000, and assume it has been vacant for seven months. The tax payable would be:

VHT = $1,200,000 x 0.03 = $36,000

In 2026, you can make the payment in three easy instalments – September 15, October 15, and November 16, 2026.

The CVA will be updated every four years. It can also change earlier if you have taken up renovations. You can check the latest CVA of your property from your property tax bill or MPAC notice. 

If the tax amount remains unpaid, interest will accrue at 1.25% monthly (15% annually) on any overdue amount. The outstanding amount is added to the property tax roll for collection. If you have multi-unit properties (e.g., duplexes) under a single roll number, one declaration covers all units if at least one unit meets the occupancy criteria.

Who Must Pay the Toronto Vacant Home Tax?

Every owner of a residential property should declare the property’s status annually. In fact, whether your property is occupied or vacant, you should declare the occupancy status. This includes single-family homes, condos, duplexes, and triplexes.

However, this would exclude fully multi-residential, commercial, industrial, assessed properties, vacant land, or parking/locker units. 

If you own multiple units, you should file for each property using the 21-digit assessment roll number. If you are a new owner, you can file the declaration depending on the closing dates for the deal. You can consult your tax consultant, like One Accounting, to get a clear picture of who should file the declaration. 

It may be noticed that even principal residences need a declaration to prove occupancy. If you are not available at the property, the declaration for the property can be filed by authorised representatives such as lawyers, family members, or other authorised representatives.

Current Vacant Home Tax Rate (2026 Tax Rate)

As of February 2026, the Vacant Home Tax rate for 2025 (to be filed in 2026) is 3% of CVA. City Council confirms the rate, unchanged from 2024. This is up from 1% and should be a strong incentive to avoid keeping the properties vacant. In fact, that would solve the very purpose of the taxation. 

There is no sliding scale applicable for VHT. It is flat 3%, unlike some speculation taxes. The rates are configured annually by law. If you have newly constructed and unassessed properties do not need to declare initially. However, they need to declare in the future years.

Which properties are considered vacant?

A property is considered vacant if it remains unoccupied for more than 6 months in a calendar year. The declaration of occupancy must state that the property is the principal residence of the owner through mail, bills, and other supporting documents. For tenants, there should be 30+ day agreements totaling 6+ months. Any rental under six months is not considered. 

If a residential property is rented out or used for commercial purposes, it is considered to be occupied. 

If you are a travelling worker, you can declare your principal residence even when you are away. But the residence should be maintained as a home base. 

If you have a multi-unit property and one unit is occupied, the entire multi-unit property is considered occupied. If you do not declare a property, it will automatically be considered to be vacant, irrespective of whether it is actually occupied or vacant. 

Of course, you can seek an audit, but these audits will require proof in the form of utility bills, leases, or tax returns.

Exemptions From the Vacant Home Tax

Well, there are a few exemptions applicable to the Vacant Home tax in Toronto. However, they would need a proper declaration and subsequent audits. 

Some of the exemptions available for the Toronto Vacant Home tax include

  • Death of owner You can claim an exemption for up to 3 years if the death occurred 1 or 2 years before the declaration. You need to provide the death certificate.
  • Principal resident in care If the property owner is in a hospital or long-term facility for more than 6 months. The exemption is applicable up to two years. You should provide a facility letter. You also need to provide proof of prior residency.
  • Renovations/repairs You can claim an exemption if the property has major work with permits that block occupancy. You need to produce work orders and receipts.
  • Ownership transfer You can claim an exemption if the full sale closes in the year. You will need to produce the land transfer deed.
  • Employment-required vacancy You can claim an exemption if the owner/spouse is in a full-time job in Toronto for more than 6 months. The principal home should be outside the GTA. You should produce the employer’s letter as proof. 
  • Court order This applies if you have a court order prohibiting occupancy for more than 6 months. Produce the order copy from the court. 
  • New inventory (developers) The exemption is applicable for up to two years. You should produce the sales listing/proof.
  • Medical secondary residence (2024+) Exemption is applicable for the owner/spouse/dependent. Applicable if the principal residence is outside the GTA. You would need to produce the medical certificate.

How to Declare Your Property Status?

The declaration for 2025 is now open. The declaration should be made by April, 2026. You can use the online portal to file the declaration. Typically, the declaration window opens in November. For instance, the 2025 declarations opened in November 2025, and you can file until April 30, 2026.
You can file your declaration online on the official portal. You can simply use your assessment roll number and get an instant confirmation of your declaration. You can also look for other options, such as phone, or even visit the City Hall or civic centres. You can track your declaration through the Property Tax Lookup.

Penalties for Not Filing or False Declarations

If a property owner fails to file a declaration by the deadline, the property will be automatically considered vacant. It will be subject to the vacant home tax even if it is occupied.
In addition, you will be charged an automatic charge of $21.24 for failing to meet the declaration deadline. If you fail to file a declaration by the due date, you will be charged a $ 250 fine. If you are found to provide false information or fail to provide the relevant information, you may face penalties of up to $10000.
In case you file late, you will lose any exemptions that may apply to you.

How Does the Vacant Home Tax Affect Property Owners and Investors?

If you are a normal, regular homeowner, filing the declaration should not be a major concern. You can declare your properties within the due date and keep the records. You can even claim exemptions if applicable to you.
If you are an investor, you would have a huge change. They used to buy properties and keep them vacant so they could sell them for profit. Now, if you have a house valued at $1 million, it will attract $30,000 in taxes. This money should be equivalent to one year of rental income. So an investor would want to rent out the property rather than leave it empty.
In case you are about to repair or renovate your home, you can plan the work so that you can claim the exemption rules. But they should be ready for city checks. They would need the proof of receipts.
Owners with many properties can file all forms together online. That should be quite easy and simple for them. If you have a home in Toronto and do not live in the city, you can declare it your principal residence.
In essence, the taxes will ensure that every property is occupied. It is planned to ensure that the homes are not left vacant.

Conclusion

The VHT, or the Toronto Vacant Home Tax, is not intended as a revenue source for the government. It is the culmination of Toronto’s firm stand on housing. If you have a house, you should use it. You cannot keep it empty. You can rent it out and stay compliant. If you keep it vacant, you need to pay up in taxes.
With the 3% tax rate on CVA or the April 30 deadline every year, it is advisable to declare your properties and ensure your finances stay intact.
If you are in doubt, get in touch with a reliable service provider for tax consultation, and they should help you understand the tax regime. One Accounting offers you an exceptional level of service quality for practically every sort of tax consultation that you may be looking forward to.

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Disclaimer: Information shared in this blog is general in nature and may not apply to all situations or circumstances. Contact One Accounting for accurate, professional advice.