This guide is general information for educational purposes only. It is not legal, tax or financial advice. Speak with a qualified lawyer, accountant or tax professional about your situation.
Toronto's Vacant Home Tax is 3% of assessed value. Who must declare by April 30, the exemptions, penalties, and how it applies to investors and second homes.
This guide is for Toronto homeowners, investors and second-home owners asking one question: does the City's Vacant Home Tax apply to my property, and what does it cost?
The short answer: every owner of a residential property in Toronto must declare its occupancy status every year, even if they live there. If a home meets the vacancy test and no exemption applies, the tax is 3% of its Current Value Assessment.
That is a meaningful number on a high-value property. Below I walk through who must declare, how the tax is calculated, the exemptions, the penalties, and how I think about it for the investors and second-home owners I advise.
Who has to declare, and what counts as vacant?
The City of Toronto's Vacant Home Tax page is clear: residential owners must declare every year, "even if they live there or qualify for an exemption." The program's stated goal is to push owners of empty homes to sell or rent them, with the revenue going to affordable housing.
The declaration covers the previous calendar year. For the 2025 tax year, the City opened its portal in November 2025 and the deadline was April 30, 2026.
You need the customer number plus the address or 21-digit assessment roll number from your property tax bill. An authorized representative can file for you.
A few points that catch people:
- Condo units are declared individually by each owner.
- Multiple properties need a separate declaration for each one.
- No declaration is needed for property assessed fully as multi-residential, commercial or industrial, for vacant land without a structure, or for a parking space or condo locker.
- New builds only need a declaration once the unit appears on the annual assessment roll from MPAC (the Municipal Property Assessment Corporation, the agency that values Ontario property).
Occupied or vacant?
A home is treated as occupied if it is your principal residence (the one place you live, get mail and pay bills) for at least six months of the year. Long absences for travel or work are fine, as long as it stays your principal residence. You can only have one.
It is also occupied if a tenant or another person lives there. Tenants need a written agreement for a term of at least 30 days, covering at least six months in total during the year. Family or friends must use it as their principal residence for at least six months.
Under the by-law, vacancy means more than six months without a self-contained unit being a principal residence or meeting the qualifying tenant occupancy test. For this tax, six months means 183 days. If you do not declare by the deadline, the City deems the property vacant and bills you.
How is the Vacant Home Tax calculated?
The tax is a flat percentage of your Current Value Assessment, or CVA (the value MPAC assigns your property for tax purposes). The City raised the rate from 1% to 3% beginning with the 2024 taxation year, and its 2025 announcement confirmed 3% for 2025.
One nuance helps owners. Ontario assessments are still based on values as of a legislated valuation date of January 1, 2016. So the tax is 3% of your CVA, rather than today's sale price. Check the CVA on your assessment notice rather than estimating from recent sales.
For the 2025 tax year, the City's billing schedule called for notices in June 2026, with payment due in three equal instalments on September 15, October 15 and November 16, 2026. The example below uses hypothetical CVAs.
| Hypothetical CVA | Annual tax at 3% | Each of 3 instalments | Same home at old 1% rate |
|---|---|---|---|
| $900,000 (condo) | $27,000 | $9,000 | $9,000 |
| $1,800,000 (semi) | $54,000 | $18,000 | $18,000 |
| $3,500,000 (detached) | $105,000 | $35,000 | $35,000 |
On a non-exempt home with a $3,500,000 CVA, one year of taxable vacancy costs $105,000. That is on top of regular property tax. Note that if you pay property tax through the City's pre-authorized payment plan, it does not cover this tax. It must be paid separately.
What exemptions are available?
A vacant property still has to be declared, but it may be exempt. The City lists these eligible exemptions, each requiring supporting documents:
- Death of a registered owner: vacancy due to an owner's death in the year being declared or either of the two preceding years, for up to three consecutive taxation years.
- Principal resident in care: in hospital or a care facility for at least six months of the year, for up to two consecutive years.
- Repairs or renovations: work prevents occupancy for at least six months, all permits are issued, and the City is satisfied the work is moving without unnecessary delay.
- Transfer of legal ownership: the sale closed in the year being declared and was a 100% transfer (adding or removing a co-owner does not count).
- Full-time employment in Toronto: the unit is needed for residential purposes by the owner or spouse, whose full-time employment requires physical presence in Toronto for at least six months. The occupant must have a principal residence outside the Greater Toronto Area.
- Court order prohibiting occupancy for at least six months.
- Vacant new inventory: never-occupied units owned by their developer and actively offered to the public for sale during the portion of the year when they could have been occupied, for up to two consecutive years.
- Secondary residence for medical reasons: periodically occupied by the owner, spouse or a dependant for medical purposes, where the owner has a principal residence outside the GTA.
The renovation exemption deserves particular attention. "Actively carried out" is the City's opinion to form, not yours. A stalled project with lapsed permits is a real risk.
What are the penalties, and how do disputes work?
The financial exposure has several layers:
- Deemed vacancy: miss the deadline and the full 3% applies.
- Interest: overdue amounts accrue 1.25% on the first day of default and on the first day of each month after.
- Collection: unpaid tax is added to the property tax roll and collected like property tax.
- Fines: false declarations, or failing to provide information when asked, can bring a fine of up to $10,000, in addition to the tax.
If you were billed but the home was occupied or exempt, you file a Notice of Complaint. The deadline to dispute a 2025 bill is December 31, 2026.
After an audit, you have 90 days from the date on the supplementary bill. A complaint decision can be appealed within 90 days to the City's Deputy Treasurer, in writing, and that decision is final.
Audits are real. The City can ask for documents, giving you 60 days to respond, and owners must keep records for at least three years. Leases, insurance certificates and tax notices showing the address are the kind of evidence it lists.
How does it apply to investors and second homes?
For second homes, the occupancy test matters. A Toronto pied-à-terre used occasionally alongside your principal home is not your principal residence. If no qualifying occupant uses it and no exemption fits, an empty year means 3% of CVA.
The employment exemption requires the occupant's principal residence to be outside the GTA; the medical exemption requires the owner's to be outside it. An owner who lives in Oakville and uses a downtown condo for work does not qualify on that basis.
For rental investors, the tenancy test matters. The City requires a written agreement of at least 30 days and six months of occupancy in total. As I read it, a unit filled only with stays under 30 days, or left empty between tenants for most of the year, is exposed. Run your own facts past your accountant.
For buyers, the tax follows the property, not the person. It forms a lien, and if a prior year was never declared, the purchaser can end up paying.
This applies to power of sale purchases too, which the City says carry no exemption. Ask for the vendor's filed declaration and have your lawyer confirm status before closing.
For pre-construction, a unit not on the annual MPAC assessment roll does not need a declaration. A purchase involving a 100% ownership transfer can qualify for the transfer exemption in its closing year. Later years need their own occupancy or exemption assessment. This is worth planning around if you hold an assignment or a unit you intend to lease.
Also note the federal picture changed. The federal law confirms that the Underused Housing Tax no longer requires a return or payment for 2025 and later years, though applicable 2022 to 2024 obligations remain. Toronto's tax is separate and still in force. My broader read on which policies matter is in this policy overview.
What this means for you
Luxury buyer: treat the declaration like your property tax bill. If you split time between homes, establish which one meets the principal residence test, and keep the records that prove it. On a high CVA, a missed filing is an expensive administrative error.
Investor: I would plan around qualifying tenant occupancy for at least six months each year. If a unit may sit empty during a lease-up or a sale, I would price the 3% into the holding cost rather than hoping for an exemption.
Rental owner: buildings assessed fully as multi-residential do not declare, which is one quiet advantage of purpose-built multifamily. For residential properties, file by assessment roll number. Individually assessed condos each need a declaration; a plex on one roll number needs one declaration for the property.
Frequently asked questions
Do I have to declare if I live in my home?
Yes. The City requires every residential owner to declare every year. If you file on time and the home is your principal residence, no tax applies.
What is the Toronto Vacant Home Tax rate?
It is 3% of the property's Current Value Assessment, starting with the 2024 taxation year. It was 1% when the program began in 2022.
When is the declaration due?
The recurring deadline is the last business day of April in the following year, subject to any City adjustment. For the 2025 tax year, the deadline was April 30, 2026.
Does a snowbird have to pay?
No, as long as the Toronto home stays your principal residence. Extended travel does not make it vacant, but you still must declare.
Is the tax working?
The City reports that declared or deemed vacant properties fell from 6,944 in 2022 to 5,989 in 2024. Those figures alone do not establish how much of the change was caused by the tax.
Sources
- By-law 979-2023, City of Toronto
- By-law 1065-2024, City of Toronto
- Vacant Home Tax, City of Toronto
- 2025 Vacant Home Tax declaration period now open, City of Toronto
- One month remaining to submit 2025 Vacant Home Tax declaration, City of Toronto
- Property tax, Government of Ontario
- Municipal Vacant Home Tax, Government of Ontario
- Underused Housing Tax Act, Justice Canada