Today, Toronto City Council approved an implementation plan to introduce a new tax on vacant Toronto homes starting in 2022.
A vacant home tax aims to increase the housing supply by encouraging homeowners to sell or rent their unoccupied home – and, if they choose to continue to keep the home vacant, a tax is levied. This revenue can then be used to fund affordable housing projects.
Using data from Vancouver’s implementation of a vacant home tax as an example, 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. Toronto’s tax rate will be determined in the tax development process.
Determining how a home is deemed vacant will be part of the tax development process, but residential property owners would be required to make a declaration each year about the occupancy status of the home.
City 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.
“The vacant home tax will increase the housing supply in Toronto. This will help open up the housing and rental market. 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.”
– Toronto Mayor John Tory
“I have advocated for a Vacant Homes Tax for some time and I am pleased that we are moving forward with this measure. 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.”
– Toronto Deputy Mayor Ana Bailᾶo (Davenport), Chair of the Planning and Housing Committee
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