Toronto’s Vacant Home Tax requires every residential property owner in the city to declare their property’s occupancy status each year, whether the property was lived in, vacant, or exempt. Miss the declaration and the City assumes the worst: your property gets deemed vacant automatically, and the tax bill follows. This applies to anyone who owns Toronto property, not just investors sitting on empty units, including someone who owns a second property, a unit they don’t currently live in, or a place they inherited. Here’s what the tax actually requires, what counts as vacant, and what happens if you miss the deadline. For everything else that comes with owning property in Toronto, see our complete Toronto real estate guide.
What Toronto’s Vacant Home Tax is, and why it exists
The Vacant Home Tax is an annual municipal tax on residential properties in Toronto that sit unoccupied for more than six months of the previous calendar year. The City introduced it as a housing-supply measure: the stated goal is to discourage owners from leaving units empty in a city short on housing, and to push those units toward the sale or rental market instead. Revenue collected goes toward affordable housing initiatives, including acquisition funding for existing rental buildings and capital repairs to Toronto Community Housing units.
It’s worth knowing this is a City of Toronto by-law, separate from the federal Underused Housing Tax that also targets vacant residential property. Different levels of government administer the two, each with its own rules and its own separate filing. Owning property in Toronto can mean dealing with both, and satisfying one doesn’t satisfy the other.
Who has to declare, and by when
Every residential property owner in Toronto has to file a declaration each year confirming their property’s occupancy status for the previous calendar year, regardless of whether the property was lived in the whole time, sat vacant, or qualifies for an exemption. This isn’t optional for owner-occupied homes either: the declaration requirement applies to every residential property in the city, and owners confirm their own principal residence is occupied the same way an owner of a second unit confirms whether theirs was.
The deadline is April 30 of the year following the year being declared. So the 2025 taxation year, covering occupancy between January 1 and December 31, 2025, had to be declared by April 30, 2026. Filing happens through the City’s own online declaration portal, and the process takes most owners only a few minutes once they have their property’s assessment roll number on hand.
What counts as vacant, and which exemptions apply
A property counts as vacant under the by-law if it was unoccupied for more than six months of the taxation year, whether that’s six months straight or in total across the year. A property being listed for sale or between tenants for a stretch doesn’t automatically make it exempt; it has to fall into one of the City’s specifically named exemption categories, and the owner has to claim it. No exemption is applied automatically just because a good reason exists.
The named exemptions are: the death of a registered owner, which can cover the property for up to three consecutive years; the principal resident being in care, such as a hospital or long-term care facility; active repairs or renovations under a permit that prevent normal occupation for at least six months of the year; a full transfer of legal ownership that occurred during the taxation year; the unit being required for the owner’s or their spouse’s full-time employment outside the Greater Toronto Area for at least six months, provided the owner’s principal residence is also outside the GTA, which requires supporting documentation such as an employer letter; a court order that prohibits occupancy; and newly built residential units that haven’t yet been occupied and are being actively marketed for sale by a developer, which can be claimed for up to two consecutive years. A separate medical exemption covers a secondary residence needed for medical reasons by an owner, spouse, or dependant whose principal residence sits outside the GTA, and requires a medical certificate to support the claim.
If your situation doesn’t fit one of these categories, it isn’t exempt, no matter how reasonable the reason for the vacancy feels. The City reports that the number of vacant properties identified through the program fell from 6,944 in 2022 to 5,989 in 2024, which it points to as evidence the tax is doing what it was designed to do, though it’s a modest shift in a city with well over a million residential properties.
How the tax is calculated
The tax rate is 3 percent of the property’s Current Value Assessment, the figure the Municipal Property Assessment Corporation assigns for property tax purposes generally. That 3 percent rate has applied since the 2024 taxation year. The program actually launched at a lower rate: 1 percent of Current Value Assessment for the 2022 and 2023 taxation years, before the City raised it to 3 percent starting with 2024. Anyone who’s seen both figures cited online isn’t looking at conflicting information; they’re two real rates from two different periods of the same program.
Because the tax is calculated against Current Value Assessment rather than market price, the bill on a property with a high assessed value can be substantial even for a single vacant year. A property assessed at $1 million that sits vacant for the required stretch would owe $30,000 under the current 3 percent rate, on top of the property’s regular annual property tax, which is calculated separately.
What happens if you don’t declare
If you don’t file a declaration by the April 30 deadline, the City doesn’t wait to find out whether your property was actually occupied. It’s automatically deemed vacant, and the full 3 percent tax applies to the property’s assessed value, whether or not anyone actually lived there. There’s no assumption of occupancy in the City’s favour, and correcting a missed declaration after the fact, through a review or an appeal, is a more involved process than simply filing on time would have been.
Beyond the tax itself, failing to declare, or filing a false or deceptive declaration, can trigger a separate penalty of $250 to $10,000. That range applies both to owners who simply never filed and to owners whose declaration turns out not to match reality, whether through an honest mistake or an attempt to avoid the tax. Filing accurately and on time avoids both problems at once.
How to file your declaration
Declarations are filed through the City of Toronto’s own Vacant Home Tax declaration portal, using the property’s assessment roll number and customer number from a recent property tax bill or MPAC assessment notice. Owners confirm whether the property was their principal residence, occupied by a tenant or permitted occupant, vacant, or covered by one of the named exemptions, and the exemption categories require supporting documentation to be available if the City later requests it during an audit, even though it isn’t uploaded at the time of filing.
Set a reminder for April 30 well in advance if you own more than one Toronto property, since each one needs its own separate declaration, and the process resets every year regardless of what you declared previously. An owner who was exempt last year for a renovation that’s since finished still has to file fresh for the current year, based on that year’s actual occupancy.
Frequently asked questions
How much is Toronto’s Vacant Home Tax?
The current rate is 3 percent of the property’s Current Value Assessment, the figure the Municipal Property Assessment Corporation uses for general property tax purposes. That rate has applied since the 2024 taxation year. The program started lower, at 1 percent of assessed value for the 2022 and 2023 taxation years, before the City tripled it. On a property assessed at $800,000, a full vacant year at the current rate would mean a $24,000 tax bill, separate from and in addition to that property’s regular annual property tax.
Do I have to declare my home for the Vacant Home Tax even if I live in it?
Yes. Every residential property owner in Toronto has to file a declaration each year, whether the property was your principal residence, rented out, vacant, or covered by an exemption. There’s no exception for owner-occupied homes; the City requires every property to be accounted for so it can identify which ones were actually vacant. Filing takes most owners only a few minutes through the City’s online portal once they have their assessment roll number on hand, and it has to be done every year, since one year’s declaration doesn’t carry forward to the next.
What happens if I forget to declare my property?
If you miss the April 30 deadline, the City automatically deems your property vacant for that taxation year, regardless of whether it was actually occupied, and the full 3 percent tax applies to its assessed value. On top of that tax, failing to declare, or filing something that turns out to be false or deceptive, can trigger a separate penalty of $250 to $10,000. Correcting a missed declaration afterward is possible through the City’s review process, but it takes real time and paperwork that filing correctly the first time avoids entirely, so it’s worth treating April 30 as a firm deadline rather than a soft one.
What exemptions are available for the Vacant Home Tax?
The City recognizes a specific list of exemptions, and none of them apply automatically; the owner has to claim the exemption when filing. They include the death of a registered owner, which can cover up to three consecutive years; the principal resident being in a hospital or long-term care facility; active repairs or renovations under permit that prevent normal occupation for at least six months; a full transfer of legal ownership during the year; the unit being required for the owner’s or spouse’s full-time employment outside the GTA, with their principal residence also outside the GTA; a court order prohibiting occupancy; and newly built units actively being marketed for sale by a developer, claimable for up to two years. A separate medical exemption covers a secondary residence needed for medical reasons, with a principal residence outside the GTA and a supporting medical certificate. A property that doesn’t fit one of these categories doesn’t qualify, whatever the reason for the vacancy.
Is the Vacant Home Tax the same as the federal Underused Housing Tax?
No, they’re two separate taxes from two different levels of government. Toronto’s Vacant Home Tax is a municipal by-law that applies specifically to residential properties within the city, filed through the City’s own portal. The federal Underused Housing Tax is a separate program administered by the Canada Revenue Agency with its own rules, exemptions, and filing requirements, and it can apply to property anywhere in Canada, not just Toronto. Owning a Toronto property that’s vacant for part of the year can mean dealing with both filings, and satisfying one doesn’t satisfy the other, so it’s worth checking your obligations under each separately rather than assuming one covers the other.
Understanding what you owe on a property starts with knowing every cost attached to owning it in Toronto. See our guides to Toronto property tax and condo fees for the rest of what ownership costs here, or explore the full set of guides for buying, selling, and owning in Toronto.