Vacant Home Tax
Every Toronto homeowner has to tell the City each year whether their home is lived in or sitting empty. Miss the declaration and the City can charge you a tax — plus a fine on top. Here's how it works, and how to make sure it doesn't cost you.
Quick answer: Toronto's Vacant Home Tax (VHT) makes every residential-property owner file a yearly declaration saying whether the home was lived in or sitting empty. If it was empty for six months or more — and doesn't fit an exemption — the City charges a tax based on the home's assessed value. If you miss the declaration entirely, the City assumes it's vacant and charges you anyway. So the single most important thing is: file the declaration on time every year, even if you live in the home full-time.
What the Vacant Home Tax is
The Vacant Home Tax is a City of Toronto tax on residential properties that sit empty. It started in 2022 to push owners of empty homes to either live in them, rent them out, or sell them — making more housing available in a city that badly needs it. The tax is a percentage of the home's assessed value (the value MPAC — the Municipal Property Assessment Corporation — puts on your home). Toronto increased the rate substantially after the first year, so check the City page for the current-year figure before you assume anything.
The tax comes into play only if the home was vacant for six months or more during the previous year — and doesn't fit one of the exemptions. Homes lived in as a principal residence, or occupied by a tenant or family member, are not taxed. But every owner still has to file a declaration each year saying which of those categories applies.
Why is it important?
Two big reasons the VHT matters to every Toronto owner — even if your home is 100% lived-in:
- Missing the declaration is treated like a "yes, it's vacant". The City doesn't send an investigator to check. If your declaration is late, they assume the worst and charge you the tax. Then it's on you to fight it.
- The tax becomes a lien on the property. If it's not paid, the debt is attached to the home itself — not the person. That means when you sell, the buyer inherits it. If a seller didn't file, the buyer can be stuck paying the seller's tax bill after closing.
In other words: the declaration is the free part. The tax is the expensive part. And the fine on top (see Penalties below) is the extra sting. All of it is avoidable with a two-minute annual filing.
Determining Occupancy Status
Every owner has to pick one of four occupancy statuses when filing. Here's what each one means:
| Status | What it means | Taxed? |
|---|---|---|
| Principal residence of homeowner | The home where you live, get mail, and pay bills. You can only have one. Must be your principal residence for at least six months of the year — but travel and extended trips (like snowbirds heading south for winter) still count as living there. | No |
| Occupied by someone other than owner | A tenant on a written lease of 30+ days, or a family member/friend using it as their principal residence. Must be occupied for at least six months total during the year. | No |
| Vacant with an eligible exemption | Home is empty, but you fit one of the exemptions listed below. You must include supporting documents when you declare. | No |
| Vacant | Empty for six months or more during the year, with no exemption. Also the default status if you don't file at all. | Yes |
Other residency situations
Common real-world scenarios that trip people up:
- Snowbirds / long trips. If you spend winters in Florida or a few months in Asia but the Toronto home is still your principal residence, declare it as "principal residence" — you're not vacant.
- Working outside Toronto or Canada. Same rule. As long as the Toronto home remains your principal residence, you're covered.
- Away for medical reasons. If you're getting outpatient care elsewhere, or caring for a sick family member, the home stays your principal residence and is not vacant. If you're admitted to a hospital or care facility for six months or more, look at the separate "Principal resident in care" exemption instead.
- Running a business from the home. A residential unit that also has a business run out of it can be declared occupied. Business tenants count as tenants for VHT purposes.
- Condo units. Every individual condo unit needs its own annual declaration.
- Multiple properties. A separate declaration is required for each property you own.
- New builds not yet assessed by MPAC. You only have to file if MPAC has already added the property to the annual assessment roll.
Eligible exemptions for vacant properties
A vacant home still has to be declared — but it may be exempt from the actual tax if it fits one of these situations. Each one requires supporting documents:
- Death of a registered owner. Home was vacant for 6+ months in the tax year because of an owner's death. Can be claimed for up to 3 consecutive tax years. Requires: copy of death certificate.
- Principal resident is in care. The person who lived there is in a hospital, long-term care, or supportive care facility for at least 6 months. Up to 2 consecutive tax years. Requires: signed letter from the health-care facility + proof of prior residency.
- Repairs or renovations. Home is undergoing major work that prevents normal use for at least 6 months of the year, all necessary permits have been issued, and the City is satisfied the work is being done without unnecessary delay. Requires: project description + contractor receipts + copies of building permits.
- Transfer of legal ownership. The property closed during the tax year in a 100% arm's-length sale (not a name change, adding a spouse, etc.). Requires: copy of land transfer deed.
- Occupancy for full-time employment. The home is needed because the owner or spouse works full-time in Toronto at least 6 months of the year, and they have a principal residence outside the GTA. Requires: proof of residency outside the GTA + employment letter or contract.
- Court order. A court order prevents anyone from occupying the property for at least 6 months of the year. Requires: copy of the court order.
- Vacant new inventory. A new unit built by a developer, not yet occupied, actively listed for sale — up to 2 consecutive years. Requires: sales listing + proof registered owner is the developer.
- Secondary residence for medical reasons. Unit is needed because the owner or a dependent is being treated in Toronto and their principal residence is outside the GTA. Requires: proof of residency outside the GTA + completed Vacant Home Tax Medical Treatment Certificate.
Do not include personal medical documents or photographs as supporting materials — use the standardized forms the City provides.
Penalties
The Vacant Home Tax has real teeth. Three layers of consequence to know:
- The tax itself. A percentage of the home's assessed value, charged annually while the home is deemed vacant. On a modest Toronto property, that can be thousands to tens of thousands of dollars — every year.
- Fines for false or missing information. A false declaration, or failure to provide information when the City requests it, can lead to a fine of up to $10,000 — on top of paying the tax itself.
- Lien on the property. Unpaid tax attaches to the property (not the person). If the seller didn't pay before closing, the buyer is legally responsible after closing. That's the biggest reason both parties in a Toronto sale need to confirm the declaration is filed and any tax paid before the deal closes.
Change of Ownership — buying or selling
The Vacant Home Tax touches every real estate transaction in Toronto. Both sides need to be careful:
- Sellers should provide a copy of the completed and filed declaration to the purchaser before closing.
- Buyers should do proper due diligence — confirm the declaration was filed, confirm no VHT is outstanding — before signing.
Scenario A — property sold within the tax year being declared: Either the seller or the purchaser can submit the declaration. If needed, either can also file a Notice of Complaint. Properties in this scenario qualify for the "transfer of legal ownership" exemption.
Scenario B — property sold after the tax year being declared: Only the seller can submit the declaration (only the seller knows the occupancy status for the prior year). If needed, only the seller can file a Notice of Complaint. If you're buying a property where the seller didn't declare — contact your real estate lawyer immediately.
If no declaration is made: the property is deemed vacant, the tax is charged, and it becomes a lien on the property — meaning the buyer inherits the debt.
Power of Sale purchases: These transfer in "as-is" condition, including any Vacant Home Tax liability. If the previous owner didn't file, the new owner is on the hook. Talk to a lawyer and ask the seller (or bank) for documentation proving the declaration or exemption status before closing.
Common mistakes I see
- "I live in my home full-time — I don't need to file." Yes you do. Every owner files every year, regardless of occupancy. Skipping = deemed vacant.
- "I forgot last year, but nothing happened." The City notice arrives in June the following year. Missing one year quietly may still catch up with you later — sometimes at closing time on a sale.
- "My tenant lived there — surely that's obvious." The City has no way to know unless you tell them. You still declare, and keep the lease on file in case they audit.
- "I was travelling for 8 months — that means it's vacant." Not if the Toronto home is still your principal residence and you're a snowbird or on temporary assignment. Declare it as principal residence and keep proof of intent to return (mail forwarding, utility bills in your name, etc.).
- "The seller filed — that's their problem." If they didn't, and the lien attaches, it's now the buyer's problem. Every Toronto real estate lawyer builds a VHT check into their closing package now. If yours didn't — ask them to.
- "I own multiple condos — one declaration covers them all." One declaration per property. Every unit, every year.
Bottom line
The Vacant Home Tax is one of those small things that becomes a very big thing if you ignore it. The declaration is free and takes about five minutes. The tax is real money — potentially tens of thousands on a Toronto property. The fine on top can add $10,000. And the lien follows the property, not the person, which means it can land on the wrong person at the worst time — at closing.
Whether you're a homeowner, a landlord, a snowbird, an executor of an estate, or a buyer looking at a Toronto property — put the annual VHT declaration on your calendar. It's the easiest tax problem to solve, and the most expensive one to ignore.
Have questions about how the VHT affects a specific situation — a sale, a purchase, an inherited property, or a rental you're between tenants on? Send me a quick note.
Primary source: City of Toronto — Vacant Home Tax. Declaration deadlines, current tax rate, exemption forms, and Notice of Complaint procedures all live on the official page.
This article is general information and is not tax or legal advice. Rules and rates are updated by the City of Toronto periodically; confirm the current details on the official Vacant Home Tax page before filing or before closing on a Toronto property.
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