Everything you need to know about the Toronto vacant home tax

Summary: The Toronto Vacant Home Tax is an annual tax on residential properties left vacant for more than six months in a year. Since the 2024 tax year the rate is 3% of the property's assessed value, or $30,000 on a $1-million home. Every Toronto residential owner must file an occupancy declaration each year, even for a principal residence, or the property is deemed vacant and taxed.

What is the Toronto Vacant Home Tax?

The Toronto Vacant Home Tax (VHT) is a yearly tax the City charges on homes that sit empty. It applies to any residential property left unoccupied for more than six months of the year, and it is charged on top of regular Toronto property taxes and land transfer tax. The City's stated goal is to push owners of empty homes to rent or sell them, and the revenue funds affordable-housing programs.

The tax has run every year since the 2022 taxation year. What changes from the early days is the rate and the rules around declaring, both covered below, so a guide written when the tax launched is now out of date.

Who owes the Toronto Vacant Home Tax?

You owe the tax only if your property is vacant for more than six months in the year and no exemption applies. Every residential owner still has to declare each year; the declaration is what determines whether the tax is charged.

A few situations the City treats as occupied: snowbirds and others away from their principal residence for travel, work, or medical care can still declare the home occupied, as long as it remains their principal residence. A home run as a business can be declared occupied. Each property an owner holds needs its own separate declaration.

You do not need to declare a property that is assessed fully as multi-residential, commercial, or industrial; vacant land with no structure; or a parking space or condo locker.

How much is the tax in 2026?

The Vacant Home Tax is 3% of the property's current value assessment, the value the Municipal Property Assessment Corporation (MPAC) assigns for property-tax purposes. On a property assessed at $1 million, that is $30,000 for the year, added to the property-tax bill.

This rate has been in place since the 2024 taxation year. When the tax launched it was 1% of assessed value; the City raised it to 3% starting in 2024, so any figure you see quoting "1%" or "$10,000 on a $1-million home" is out of date.

How and when do you declare?

Every residential property owner in Toronto must declare the property's occupancy status once a year, even if they live in it. The declaration is made through the City's online Vacant Home Tax portal using the customer number and assessment roll number from a property-tax bill, and it can be filed by the owner or someone acting on their behalf.

For the 2025 occupancy year, the declaration deadline was April 30, 2026. The deadline falls in the spring of the following year, so the declaration for a given year's occupancy is made early the next year. Owners who end up subject to the tax are issued a Vacant Home Tax Notice the following June, with payment due in three equal instalments. For the 2025 tax year, those instalments fell on September 15, October 15, and November 16, 2026.

What happens if you miss the deadline or declare falsely?

Missing the declaration is costly. If the City does not receive a declaration by the deadline, the property is deemed vacant and billed the 3% tax — there is no longer a flat late-filing fee, the home is simply treated as empty. A separate, larger risk applies to dishonesty: a false declaration of occupancy status, or failing to provide information when the City asks for it, can draw a fine of up to $10,000, on top of the tax itself.

The City backs this up with audits. It can audit a declaration at random or after a tip, and an audited owner has to produce evidence the home was occupied: vehicle registration, a driver's licence, income-tax notices, a lease, or insurance certificates. Records must be kept for three years.

Late payment of an assessed tax carries interest of 1.25% per month on the overdue amount, and the unpaid balance is added to the property-tax roll and collected like property tax.

What exemptions are available?

A property can be vacant for more than six months and still avoid the tax if it qualifies for an exemption, but the exemption still has to be declared, with supporting documents. The current exemptions are:

• Death of a registered owner. Vacant because an owner died in the year or the two prior years (claimable up to three consecutive years).

• Principal resident in care. The resident is in a hospital or long-term or supportive care facility for at least six months (up to two consecutive years).

• Repairs or renovations. Major work with permits issued prevents occupancy for at least six months and is being carried out without undue delay.

• Transfer of legal ownership. A 100% sale of the property closed during the year being declared.

• Required for employment. The owner needs the unit to work full-time in Toronto and keeps a principal residence outside the Greater Toronto Area.

• Court order. An order in force prohibits occupancy for at least six months.

• Vacant new inventory. A developer's newly built, never-occupied unit actively offered for sale (up to two years). Added for the 2023 tax year.

• Secondary residence for medical reasons. The unit is needed for medical care and the owner's principal residence is outside the GTA. Added for the 2024 tax year.

For each, the City requires evidence, for example a death certificate, building permits, a land transfer deed, or a court order.

How does the Vacant Home Tax affect buyers?

Because the Vacant Home Tax attaches to the property rather than the owner, an unpaid balance becomes the new owner's problem. The tax forms a lien on the home, so a buyer who does not check the declaration history can inherit the previous owner's bill, and if no declaration was filed, the property can be deemed vacant and taxed after closing.

This is where your lawyer matters. At Ownright we run a tax inquiry on every purchase to confirm taxes are current, and we ask the seller's lawyer for a copy of the filed occupancy declaration so you have written confirmation the property is not carrying a Vacant Home Tax charge. The same point applies on a power of sale purchase, where the property is taken "as is" and the tax follows the home.

Frequently asked questions

What is the Toronto Vacant Home Tax rate in 2026?

It is 3% of the property's current value assessment, the rate in place since the 2024 taxation year. On a home assessed at $1 million, that is $30,000 for the year.

Do I have to declare if I live in my home?

Yes. Every Toronto residential owner must file an occupancy declaration each year, even for a principal residence. If you do not declare by the deadline, the property is deemed vacant and taxed.

When is the Toronto Vacant Home Tax declaration due?

The declaration is due in the spring following the occupancy year. For the 2025 occupancy year the deadline was April 30, 2026, and the declaration is filed through the City's online portal.

What happens if I miss the declaration deadline?

The City assumes the property was vacant and issues a Vacant Home Tax bill at the 3% rate. There is no flat late fee anymore; the consequence is being taxed as vacant. You can dispute the bill with a Notice of Complaint.

Is rented property subject to the tax?

No. A property occupied by a tenant for at least six months of the year is not subject to the tax. Renting out a property you do not live in is a common way to stay onside.

Who pays the tax when a home is sold?

Because the tax attaches to the property, an unpaid balance can fall to the buyer. The buyer and seller should confirm the declaration was filed before closing; a real estate lawyer checks this as part of the purchase.

About the author

Benjamin Berry is a co-founder and principal lawyer at Ownright. He works on Ontario residential closings, refinances, and sales, and writes to make the parts of a transaction most people meet only once or twice far easier to understand.

At Ownright, we focus entirely on Ontario residential real estate law. We help homeowners with purchase closings, refinancing, sales, and status certificate reviews, pairing a simple digital platform with licensed Ontario lawyers who handle the details. You can start your closing online or get in touch with any questions.

Legal references: City of Toronto Municipal Code, Chapter 778 (Taxation, Vacant Home Tax); City of Toronto Act, 2006.

Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.