Toronto's Vacant Home Tax: Everything you need to know

What is the Vacant Home Tax?

The Vacant Home Tax (VHT) is a municipal tax applied to Toronto residential properties that are left unoccupied for at least six months of the taxation year. The goal is to increase housing availability by encouraging owners to occupy or rent their homes. The Vacant Home Tax applies annually and requires a formal declaration from every residential property owner.
 

How much is the tax?

The Vacant Home Tax currently charges 3% of the property’s Current Value Assessment (CVA).

For example, if your property’s assessed value is $1,000,000, the VHT would be $30,000 for a year the property is deemed vacant. Toronto’s rate has changed as the program has evolved, so owners should review the current rate each year.
 

Who is required to declare?

All residential property owners in Toronto must declare the occupancy status of their property each year, even if the property is occupied or exempt. Condominium units, high-rise units, and single-family homes all require a declaration.
 

What is the deadline to declare?

The deadline to declare for the 2025 year is April 30, 2026. Toronto sets the exact date annually. Owners should confirm the current deadline on the City of Toronto’s website or through their manager.
 

What counts as vacant?

A property may be considered vacant if it was not occupied as a principal residence by the owner, tenants, or other occupants for at least six months of the taxation year.
 

Exemptions

Some properties may be exempt from the Vacant Home Tax. Common exemptions include:

• Death of an owner: The home was vacant for at least six months during the taxation year due to the death of a registered owner.
   
• Principal resident in medical or long-term care: The principal resident is living in a hospital, long-term care, or supportive care facility for at least six months during the taxation year.
   
• Major repairs or renovations: The home is undergoing significant repairs or renovations that prevent occupation and normal use of the property for at least six months of the taxation year.
   
• Transfer of ownership: The property was sold and the ownership transfer was completed during the tax year.
   
• Employment-related occupancy: The vacant unit is required for residential purposes because the owner or their spouse is employed full-time in Toronto for at least six months during the year, with their main residence outside the Greater Toronto Area.
   
• Court order: A legal order prevents the property from being occupied for at least six months of the taxation year.
   
• Vacant new inventory (developer-owned): A newly built residential unit owned by a developer that has never been occupied and is actively listed for sale.
   
• Secondary residence for medical reasons: The property is required as a secondary residence for the owner, their spouse, or a dependent due to medical needs, while their primary home is outside the Greater Toronto Area.

Owners should review Toronto’s Vacant Home Tax exemption categories to confirm eligibility.
 

What happens if you fail to declare?

Failing to file a Vacant Home Tax declaration results in the property being treated as vacant by default, incurring the full 3% tax. It can also result in penalties between $250 and $10,000.
 

What happens if you file a false declaration?

Making false or deceptive statements in a declaration can lead to penalties between $250 and $10,000.
 

How is occupancy verified?

Occupancy may be verified through documentation such as lease agreements, utility statements, or other records. Toronto may request additional proof during an audit. Owners should maintain clear, dated records to support their declaration in case any questions arise later.
 

How the Vacant Home Tax affects property sales

Who files the Vacant Home Tax declaration depends on when the property is sold.

• If the sale happens during the tax year, either the seller or the buyer can file the declaration.
   
• If the sale happens after the tax year has ended, the seller must file it, because only the seller knows whether the home was lived in during that year.

The Vacant Home Tax is tied to the property, not the owner, so it’s important for buyers to confirm that the declaration was filed before closing. Lawyers or title companies may also require this proof before closing. If the declaration isn’t taken care of, it can slow down or delay the sale.
 

Long-term rental properties

Long-term rentals may qualify as occupancy for the Vacant Home Tax when tenants live in the unit for at least six months during the taxation year (it can be in aggregate). Owners should keep records that confirm lawful tenancy. Some types of rentals require registration under Toronto’s short-term rental rules.
 

How are disputes handled?

If an owner disagrees with a Vacant Home Tax assessment, Toronto provides an appeal process. The owner may request a review within the city’s stated deadlines and provide supporting documents. Appeals must follow the formal procedure set by the city. Legal or tax professionals may help owners navigate the process.
 

Mixed-use buildings

Generally, only the residential portion of a mixed-use property is subject to the Vacant Home Tax. Commercial areas are typically not included. Owners of mixed-use condos or multi-unit buildings should confirm how the city classifies their space and file accordingly.
 

Secondary homes

Secondary homes may be subject to the Vacant Home Tax if they remain unused for most of the year. Owners with multiple residences should review how the city defines a principal residence and how occupancy is measured. Seasonal or occasional use may not meet the threshold for occupancy.
 

How a condo property management company can help

A professional condo property management company like FirstService Residential can help condo corporations communicate Vacant Home Tax deadlines and support accurate recordkeeping practices for the corporation.

We provide full-service condo management across Ontario, including maintenance planning, financial management, and resident support. With our 24/7 customer care team and experienced local teams, we help simplify condominium operations and enhance community value.

Contact FirstService Residential today to learn how we can help your condo corporation thrive.

This information is provided for general informational purposes only and is not intended to constitute, and should not be relied upon as, legal, regulatory, financial, or operational advice, or as a representation or guarantee of any specific services, capabilities, or outcomes. Property management needs, regulatory requirements, market conditions, and available services vary by jurisdiction, property type, and community. FirstService Residential provides services through locally based affiliates and associates, and services and results may vary by community, region, contractual terms, and applicable law.