How the City of Toronto plans to redesign vacant home tax program

The City of Toronto is still playing catch-up from last year’s vacant home tax debacle.

The vacant home tax program was created to discourage speculators from keeping empty homes to boost the housing supply in the city. However, about 20 per cent of property owners were unaware they needed to declare occupancy every year, prompting thousands to receive money-owing notices in the mail. In 2023, more than 169,000 complaints were filed, and around 1,100 still need to be reviewed.

However, city staff has put forward a plan so history doesn’t repeat itself.

“What the people experienced last year was terrible, heartbreaking, it’s scary,” Mayor Olivia Chow said.

The city hopes to improve the vacant home tax and not eliminate it, saying it is crucial in dealing with Toronto’s current housing crisis.

“Every house that we can turn into a lived home just saved another $500,000 of having to build that one,” Coun. Shelley Carrol noted.

There are a number of changes being recommended to the program for this year, which will be considered at next week’s executive committee meeting.

To improve communication, property owners would receive two direct mail notices, two emails, and two robocalls, as necessary. Homeowners would also be able to make their declaration in various ways: online, in-person, at a drop-in session, by paper or through a newly created team at 3-1-1, which will be serviced in 180 languages.

“It’s about letting them know the choices they have and the information they need in order to take the action of declaring,” says Beth Waldman, the City’s interim chief communications officer.

City staff also propose changing the deadlines. Filing begins on Nov. 1 and homeowners would have until April 30, to align with the income tax deadline. Those who are billed would also have an extra three months to pay or dispute the charge, making payments on the 15th of September, October and November. Also, declaration fees would be waived until further notice.

This year, the vacant home tax goes up from one per cent to three per cent. The city estimates that will generate $105 million to be reinvested into housing initiatives.

“We’re working to try and look at the amount of rental properties that become available in the city compared to new rental builds that may have happened, so we can review the delta,” Stephen Conforti, the City’s Chief Financial officer, said.

As for how many properties in Toronto were actually vacant, the city estimates there were 10,180 vacant homes in 2023, compared to an estimated 8,695 in 2022.