Revenues from the new tax will go towards housing initiatives
Today, Mayor John Tory announced a City of Toronto staff report will be going to Executive Committee next week recommending a tax levy on vacant Toronto homes starting in 2022.
A vacant home tax increases the housing supply by encouraging homeowners to sell or rent their unoccupied home, and if they choose to continue to keep the home vacant, a tax is levied. This revenue can then be used to fund affordable housing projects.
Using data from Vancouver’s implementation of a vacant home tax as an example, if one per cent of Toronto’s housing stock is vacant, at a tax rate of one per cent on the average Toronto home’s current assessed value, this could equal $55 to $66 million in tax revenue per year.
Determining how a home is deemed vacant will be part of the tax development process, but residential property owners would be required to make a declaration each year as to the occupancy status of the home.
If adopted, the tax will take a year to set up and implement, as technology, a public awareness campaign, exemptions, administrative and enforcement functions will need to be developed to support the levy.
If approved, the report would go before City Council at the December 16 and 17 meeting. The full report, Policy Analysis, Potential Design and Possible Implementation of a Vacant Home Tax in Toronto , is available online.
“We knew before the pandemic that we needed to increase the supply of affordable housing and ensure the city remains a place where all members of the workforce can contemplate living. In the wake of the pandemic, this is more important than ever.
I want to be very clear: the vast majority of Toronto residents will not pay this tax. I support moving ahead with this and doing everything we can to make sure it is implemented in the right way.
We simply can’t afford, from the housing supply perspective, to have housing accommodation for thousands of people sitting empty. You can live in it, you can rent it, but if it sits empty you will pay a tax that helps us build more affordable housing people can live in.”
– Mayor John Tory
While a vacant home tax is not specifically a revenue generating tool, any revenue generated could be used toward funding important housing initiatives across the city.