If you own a property in Toronto that's sat empty for part of the year, whether because you inherited it, travel frequently, or are between tenants, the Toronto Vacant Home Tax likely applies to you, and the cost of not addressing it has gone up significantly. Here's what owners actually need to understand before the next declaration deadline.
What counts as a vacant property under this tax?
A residential property that was vacant for six months or more during the previous year, unless it qualifies for a specific exemption.
Do all Toronto homeowners need to declare, even if their property wasn't vacant?
Yes. Every residential property owner is required to declare their property's occupancy status annually, regardless of whether it was actually vacant.
When is the next declaration deadline?
The declaration for the 2026 tax year is due in February 2027.
What should an owner do if their Toronto property has been sitting vacant?
It's worth reviewing whether selling or renting the property makes more financial sense than continuing to hold it vacant, especially given the increased tax rate. Acting before the deadline also tends to mean less pressure during the process.
What the Tax Actually Is Now
Toronto's Vacant Home Tax currently sits at 3 percent of a property's assessed value, a substantial increase from the 1 percent rate when the tax was first introduced. For a home assessed at even a modest value by Toronto standards, that jump turns a manageable annual cost into a genuinely significant one. This is the detail that catches a lot of owners off guard, since many still remember the original, lower rate.Who This Actually Affects
This tax isn't limited to homes sitting empty for investment purposes. It applies to any residential property that was vacant for six months or more of the previous year, unless it qualifies for a specific exemption. We see this affect a wide range of owners: people who inherited a family home and haven't decided what to do with it, homeowners who spend extended time abroad or with family in another country, and landlords between tenants for longer than expected.The Declaration Deadline That Matters
Every residential property owner in Toronto is required to declare their property's occupancy status annually, regardless of whether the home was actually vacant. The next declaration deadline for the 2026 tax year falls in February 2027, and missing it, or declaring incorrectly, can result in the tax being applied even to a property that was genuinely occupied. This is a step some owners overlook simply because they assume the tax only applies if they proactively report a vacancy, when in reality the declaration itself is mandatory for everyone.What Owners Should Consider Doing Now
For owners who do have a property that's been vacant or will be for part of the coming year, the tax increase changes the math on whether it makes sense to sell, rent, or continue holding the property as is. Listing a long-vacant property, or moving it into the rental market even temporarily, can offset a tax that otherwise erodes the property's value as an investment with no offsetting income. Acting before the rush of inventory that tends to hit as the deadline approaches also tends to result in a smoother, less pressured sale process.Considerations for Owners Living Outside Canada
We work with a number of clients who own Toronto property but live abroad, including newcomer and international families who inherited or purchased a home here and haven't yet decided on next steps. For these owners, understanding both the vacancy declaration requirement and the tax's financial impact is especially important, since the property may sit vacant simply due to distance rather than intent. Our network of bilingual real estate lawyers and property professionals means these conversations can happen comfortably in Spanish, with guidance on both the local tax requirements and the sale or rental process if that becomes the right decision.If you own a property in Toronto that's been sitting vacant, or you're unsure how the Vacant Home Tax affects your situation, reach out to the Lisbeth Herrera Team before the February 2027 deadline. We can help you understand your options clearly, in whichever language makes this easier to navigate.
How much is Toronto's Vacant Home Tax right now?
The tax is currently 3 percent of a property's assessed value, up from the original 1 percent rate.
Frequently Asked Questions
The tax is currently 3 percent of a property's assessed value, up from the original 1 percent rate.
What counts as a vacant property under this tax?
A residential property that was vacant for six months or more during the previous year, unless it qualifies for a specific exemption.
Do all Toronto homeowners need to declare, even if their property wasn't vacant?
Yes. Every residential property owner is required to declare their property's occupancy status annually, regardless of whether it was actually vacant.
When is the next declaration deadline?
The declaration for the 2026 tax year is due in February 2027.
What should an owner do if their Toronto property has been sitting vacant?
It's worth reviewing whether selling or renting the property makes more financial sense than continuing to hold it vacant, especially given the increased tax rate. Acting before the deadline also tends to mean less pressure during the process.