The Toronto Vacant Home Tax is a municipal tax of three per cent of your property’s assessed value, charged when a residential property sits empty for more than six months in a calendar year and does not qualify for an exemption. Every residential property owner in Toronto has to file an occupancy declaration each year, even if you live in the home full time, because a missed declaration lets the City treat the property as vacant and bill you the full tax.
That second sentence is where most of the trouble starts. In our real estate practice we see owners who never left their home receive a bill for tens of thousands of dollars, only because a declaration slipped past the deadline. This guide explains how the tax works in 2026, who has to declare, what counts as vacant, the exemptions that apply, and the exact steps to take if you receive a bill you believe is wrong.
What is the Toronto Vacant Home Tax?
The Vacant Home Tax is a yearly tax the City of Toronto charges on residential properties that stay empty. It runs under City of Toronto Municipal Code Chapter 778, the by law Council passed in 2022 using its taxing power under the City of Toronto Act, 2006. The aim is to push empty homes back into use by giving owners a reason to rent or sell rather than leave a property sitting vacant. The money the City collects is directed to affordable housing.
The tax is tied to the value of your home. It is calculated on the Current Value Assessment, the figure the Municipal Property Assessment Corporation, known as MPAC, sets for your property. Early signs suggest the tax is doing part of its job. The City reports that the number of vacant homes fell from 6,944 in 2022 to 5,989 in 2024.
When is a property considered vacant?
A home is treated as vacant if it was not used as a principal residence and was not lived in for more than six months, that is more than 184 days, during the calendar year. The six months do not have to run back to back. Shorter stays through the year can add up to the six months of occupancy that keeps a property out of the tax.
A property counts as occupied when you, a permitted occupant, or a tenant lived in it as a residence for at least six months. Long term rentals count, so a tenanted unit is not vacant, but you still have to declare it as occupied and keep the lease and records in case the City asks. Vacant land with no home on it, and properties taxed as commercial, industrial or multi residential, fall outside the tax.
How much is the tax and how is it calculated?
For the 2024 and 2025 tax years the rate is three per cent of your property’s Current Value Assessment. The rate started at one per cent in 2022 and 2023 and tripled beginning with the 2024 year. The math is simple. Multiply the assessed value by the rate.
Vacant Home Tax equals 3 per cent of the Current Value Assessment.
On a home assessed at $1,000,000 that is $30,000 for a single vacant year. On a home assessed at $700,000 it is $21,000. This sits on top of your regular property tax, and it is payable in the year after the year the home was vacant. The table below shows how the rate has moved.
| Tax year | VHT rate | Tax on a $1,000,000 home |
|---|---|---|
| 2022 | 1 per cent | $10,000 |
| 2023 | 1 per cent | $10,000 |
| 2024 | 3 per cent | $30,000 |
| 2025 | 3 per cent | $30,000 |
Rates are set by Council and current as of publication. Confirm the rate for your year on the City of Toronto website before you rely on it.
One detail catches owners off guard. The tax forms a lien on the property, much like regular property tax. It attaches to the home, not to you personally, and interest builds on any unpaid amount.
Who has to declare and when is the deadline?
Every residential property owner in Toronto has to declare the occupancy status of the property each year, even for a principal residence and even if the home was clearly lived in. The City sends a notice, and the declaration is filed online, by phone or in person. The deadline is April 30. For the 2025 occupancy year the deadline was April 30, 2026.
The deemed vacant rule is the trap. If the City does not receive your declaration by the deadline, it assumes the property was vacant and issues a Notice of Assessment for the full tax, no matter who was living there. Owners subject to the 2025 tax were issued notices in June 2026, with payment due in three instalments on September 15, October 15 and November 16, 2026.
The practical takeaway is short. File the declaration on time every year, occupied or not. It takes a few minutes and it removes the single biggest source of wrongful bills.
What exemptions are available?
A property can sit vacant and still avoid the tax if it fits one of the recognized exemptions. You still have to declare. You claim the exemption in the declaration and back it with documents. The main categories are below.
| Exemption | What it covers | Documents usually needed |
|---|---|---|
| Death of an owner | Vacant six months or more because a registered owner died. Available up to three years in a row where the death was in the tax year or the two years before. | Death certificate |
| Principal resident in care | The resident was in hospital or a long term or supportive care home for at least six months. Available up to two years in a row. | Letter from the facility on letterhead, plus proof the person lived there before entering care |
| Repairs or renovations | Major work blocked normal use for at least six months, permits were issued, and the City accepts the work is moving without undue delay. | Project description, permits, contractor records |
| Transfer of ownership | The property sold in the tax year in a full transfer of title. Name changes or adding or removing a second owner do not count. | Land transfer deed |
| Required for work | The owner or spouse works full time in Toronto for at least six months and keeps a principal residence outside the Greater Toronto Area. | Proof of residence outside the GTA, plus an employer letter or contract |
| Court order | A court order barred occupancy for at least six months of the year. | Copy of the court order |
| New developer inventory | A newly built unit a developer offered for sale that was never lived in. Available up to two years in a row. | Sales listing and proof the owner is the developer |
| Secondary residence for medical reasons | The unit is needed by the owner, a spouse or a dependent for medical reasons, with a principal residence outside the GTA. | Proof of residence outside the GTA, plus the City medical exemption form |
These exemptions and their documents are current as of publication and the City updates them, so confirm the details on the City of Toronto Vacant Home Tax page before you rely on them.
What do I do if I get a bill I think is wrong?
First, do not ignore it. The tax is a lien on your home and interest keeps adding up while you wait. Filing a complaint does not pause that interest, so move quickly. There is a two stage process built into the by law, a complaint stage and an appeal stage.
1. File a Notice of Complaint within 90 days. You have 90 days from the date on the Notice of Assessment to file a complaint with the City, online, by mail or in person. Set out exactly why the bill is wrong, for example the home was your principal residence, it was rented for at least six months, or it qualifies for an exemption.
2. Attach your evidence at the complaint stage. This is the step people get wrong. Useful proof includes utility bills in your name at the address, your Ontario driver’s licence or health card showing the address, bank statements or mail, a signed lease for a tenant, building permits and contractor records for a renovation, or a death certificate for an estate.
3. Respond to any request for documents. The City may write asking for more. You generally have 60 days from the date of that letter to upload what they ask for.
4. Appeal within 90 days if the complaint is refused. If the City denies your complaint and you still disagree, you can appeal to the Appellate Authority, the City’s Deputy Treasurer, within 90 days of the decision. The appeal is decided in writing, normally within 30 days of the hearing, and that decision is final at the City level. A final decision can still be challenged by judicial review at the Ontario Divisional Court, though that turns on the record you built earlier.
The detail most articles miss. Your complaint decides the case. On appeal you cannot raise new grounds. You are held to the issues and the information you put in the original complaint. If you leave a ground out at the complaint stage, you can lose the right to argue it later. Put every reason and every document in at the start.
As of publication you can dispute a 2024 bill until July 3, 2026, and a 2025 bill until December 31, 2026. The window for 2022 and 2023 bills closed on December 31, 2025. The City sets these dates and can change them, so check the current deadline before you file.
This process matters because the early years were rough. For the 2023 tax year the City received more than 169,000 complaints and reversed over 100,000 assessments after owners who lived in their own homes were billed in error. The City has since reworked parts of the program, but the lesson stands. A wrong bill is common, and the job of disputing it on time falls on you.
How does the tax affect buying or selling a home?
Because the tax attaches to the property rather than the person, it can become a closing problem. If a seller failed to declare and the City later deems the home vacant, the bill and the lien can land on the new owner.
On a purchase, confirm the seller filed the declaration for the relevant year and obtain proof of occupancy or exemption before closing. A missing declaration can produce an assessment after you take title.
For estates, the executor still needs to declare for a home that sits empty during administration, and the death of an owner exemption may apply. A wills and estates lawyer can help an estate stay on top of this.
On a power of sale, a buyer takes the property as is and inherits the tax obligations attached to it.
This is the kind of item a real estate lawyer checks as part of closing, both on Toronto purchases and on Ottawa purchases where the local tax works a little differently.
Toronto Vacant Home Tax compared with the Ottawa Vacant Unit Tax
If you own property in both cities, the rules are close but not the same. Ottawa runs its own version, the Vacant Unit Tax, with an earlier deadline and a rate that climbs the longer a unit stays empty. Here is how they line up.
| Feature | Toronto Vacant Home Tax | Ottawa Vacant Unit Tax |
|---|---|---|
| Tax rate | 3 per cent of assessed value (2024 and 2025) | 1 per cent, rising 1 per cent for each added consecutive vacant year, up to 5 per cent |
| Introduced | 2022 | 2023 |
| Vacant threshold | More than six months (over 184 days) | More than 184 days |
| Annual declaration | Required for every residential owner | Required for every residential owner |
| Deadline | April 30 | Third Thursday in March (March 19, 2026 for the 2025 year), late filing to April 30 with a $250 fee |
| Where to declare | City of Toronto portal | City of Ottawa portal or MyServiceOttawa |
The graduated rate is the real difference. A unit left empty in Ottawa for several years climbs toward five per cent, while Toronto applies a flat three per cent each vacant year.
Is it the same as the federal Underused Housing Tax?
No. The Underused Housing Tax is a separate federal tax run by the Canada Revenue Agency, with its own rules, forms and exemptions. The Toronto Vacant Home Tax is a municipal tax run by the City. The two are not connected, and dealing with one does nothing for the other. If you think the federal tax could apply to you, check the CRA guidance or speak with a tax adviser, and keep the two obligations separate in your records.
The mistakes we see most often
The same handful of errors account for most of the bills we help dispute. Each one is avoidable.
Skipping the declaration because you live there. You must declare every year. Miss the deadline and the City can bill the full three per cent even though you never left.
Assuming a tenanted unit needs nothing. A rented home is occupied, but you still declare it and keep the lease and records to prove it.
Executors forgetting the estate property. An empty home during probate still needs a yearly declaration, even where the death of an owner exemption applies.
Closing without checking the seller’s declaration. The lien follows the property, so an undeclared year can become the buyer’s bill.
Disputing late or with thin proof. Miss the 90 day window or skip the documents and you weaken or lose a dispute you might have won.
Frequently asked questions
Do I have to declare if I live in my home?
Yes. Every residential property owner in Toronto declares the occupancy status each year, including for a principal residence. If the City does not receive your declaration by the April 30 deadline, it can treat the home as vacant and bill the tax. The declaration takes only a few minutes and is the single best way to avoid a wrongful assessment.
What counts as occupied?
A home is occupied when you, a permitted occupant or a tenant used it as a residence for at least six months of the year. The six months do not have to be consecutive. Keep records such as utility bills, a driver’s licence showing the address, or a signed lease, because the City can ask you to prove occupancy during an audit.
How much is the tax?
For the 2024 and 2025 tax years the rate is three per cent of your property’s Current Value Assessment, the value MPAC sets. On a home assessed at $1,000,000 that is $30,000 for the year, on top of your regular property tax. The rate was one per cent in 2022 and 2023.
I got a bill but my home was not vacant. What now?
File a Notice of Complaint within 90 days of the date on the bill and attach proof that the home was occupied or exempt. Do not simply ignore it, because interest keeps running and the amount is a lien on the property. If the complaint is refused, you can appeal within 90 days. Outcomes depend on your facts and your documents, so gather strong proof before you file.
Does the tax follow the property when it is sold?
Yes. The Vacant Home Tax attaches to the property and can become a lien. A buyer can inherit a bill for a year the seller did not declare, which is why confirming the declaration was filed is part of a careful closing. Ask the seller for proof before you take title.
Is there a tax on vacant homes in Ottawa too?
Yes. Ottawa has a Vacant Unit Tax that began in 2023. It starts at one per cent of assessed value and rises by one per cent for each added consecutive vacant year, up to five per cent. The deadline is earlier than Toronto’s, generally the third Thursday in March, so owners with property in both cities should track two different dates.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
