Wanna Know About Vacant Home Tax? Newmarket’s Tax Partners Explained In Detail!

The taxing procedures in the city of Toronto is something that is constantly updated by the government. However, many common people are still not completely informed about the basic details they have to know about. Hence, Tax Partners from Newmarket came up to explain Vacant Home Tax for your information. Homeowners in Toronto, whether they are individuals, companies, or groups like partnerships and trusts, are required to fill out a form stating the status of their living spaces for the year 2022 and settle any taxes due on their property by the end of 2023.

What Is Vacant Home Tax?

The City of Toronto has introduced a Vacant Home Tax for all unoccupied residential buildings for the 2022 tax period. The aim of this tax is to boost the housing stock by discouraging property owners from letting their homes sit empty. Every year, property owners in Toronto’s residential area are required to indicate whether their property is occupied or vacant. For the year 2022, this report needs to be filed by February 2, 2023. Should the report not be filed, the property will be considered vacant, and the tax will be charged.

Know About Vacant Property!

In Toronto, a building is considered vacant if it hasn’t had anyone living in it for over half a year in the last year, unless the home is the main place where the owner lives. If the building is a place where people rent to live, it won’t be seen as vacant if it’s rented for at least 30 days straight and has one or more people living there for six months or more during the year. Renting out a place for short periods, like through AirBnB, usually means the building will be seen as vacant.

Tax Calculation

Homes and other living spaces that are taxed under this rule, whether because the owner didn’t submit a declaration by the deadline, or if a declaration was submitted late, will have to pay 1% of the property’s 2022 Current Value Assessment. If a declaration is made after the deadline, a penalty of $250 could be imposed. Not submitting a declaration at all, or submitting one that contains false information, could lead to a penalty ranging from $250 to $10,000.

Exemptions Available

Here are the situations in which one can expect property tax available,

  • Passing of the owner on the deed, relevant to the year of death and the following year.
  • The property is in the process of being fixed up or remodeled, which stops it from being lived in for at least six months each year, all the needed permissions have been granted, and the City’s main building official thinks the job is being done without any unnecessary hold-ups.
  • The main person living in the house is staying in a hospital, nursing home, or similar place for at least six months every year. This exemption is valid for up to two years in a row.
  • The property is now owned by someone who is not related to the previous owner or a company.
  • The house is needed for living for at least six months every year because the owner who lives there works from home.
  • A legal ruling stops the house from being lived in for at least six months every year.

Making Property Status Declaration

Homeowners in Toronto who own residential properties might have gotten a Notice already, which includes the necessary details for declaring their property. If they haven’t received this notice, they can get their 21-digit assessment roll number and customer number from their tax bill or property account statement. The City has set up an online portal for making declarations available at toronto.ca/VacantHomeTax. Alternatively, homeowners can fill out a paper form available online, but it must be submitted by the specified deadline. A Vacant Home Tax Notice will be sent out in March or April, and the payment is required by May 1. The Notice will also include instructions on how to make the payment.

It’s important to note that this tax is distinct from the Federal Underused Housing Tax.

Please note that it is a general comment on Vacant Home Tax. Get in touch with Tax Partners to know about your personalized situation and the taxes for it. You can call them at +1-905-836-8755 or email to info@taxpartners.ca

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