A report that recommends implementing a tax on vacant Toronto homes in 2022 will be put forward to the city’s executive committee next week.
City officials say the tax would increase Toronto’s housing supply by encouraging people to sell or rent their unoccupied home and that revenue generated through the tax could go to support affordable housing projects in the city.
“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,” Toronto Mayor John Tory said.
“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.”
At a media availability Thursday, Tory said people who wouldn’t pay the tax include those renting out condos, as well as those who have left their home for a vacation or as a result of renovations.
According to the Toronto report, and using data from Vancouver’s implementation of an empty home tax, the tax revenue generated in Toronto could be between $55 million and $66 million per year. This is assuming that 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.
“We know that Toronto’s vacancy rate has been historically low, making finding housing a challenge,” Toronto’s deputy mayor and planning and housing committee chair, Ana Bailão, said.
“Transitioning vacant homes to occupied homes would improve housing choice and affordability for a number of Toronto residents.”
The city report recommends a minimum six-month occupancy within a 12-month calendar period for homeowners in Toronto.
“This period of time acknowledges several life circumstances … for individuals who travel for work, or spend extended periods of time outside of Toronto,” the report reads.
“In order to enable the city to identify the most vacant homes in a timely and accurate manner, a universal declaration by all residential property owners would be an appropriate method.”
Officials say the tax development process will help determine how a home is deemed vacant.
If approved, the report will go before city council on Dec. 16 and 17. If the tax is adopted, officials say it would take a year to set up and implement.
Vancouver already has a similar tax in place, which requires homeowners to submit a declaration each year to determine if their property is subject to the tax.