Toronto Vacant Home Tax 2026: What Every Homeowner Must Know

The City of Toronto introduced the Vacant Home Tax in January 2023 at 1% of assessed value. In 2024, the rate was tripled to 3%. Every Toronto residential property owner is required to file an annual declaration — even if the home is your full-time primary residence. Miss the declaration and the City automatically deems your property vacant and sends you a tax bill. Thousands of Toronto homeowners have been hit with surprise VHT bills they didn't deserve. Here's what you actually need to know.

How the tax works

The Vacant Home Tax applies to residential properties in the City of Toronto that are vacant for more than 6 months in a calendar year. The rate is 3% of the property's current value assessment (CVA) from MPAC.

Example: a Toronto home with a CVA of $1,200,000 left vacant for 7 months in 2026 = $36,000 in VHT for that year, separate from regular property tax.

What counts as "vacant"

The City's definition is specific. A property is considered vacant if it was NOT used as the principal residence of the owner, AND was NOT occupied by a tenant under a lease, AND was NOT occupied by a permitted occupant for a continuous period of at least 30 days, AND such non-occupation continued for more than 6 months in the calendar year.

Exemptions exist for: death of owner, court order, hospitalization/long-term care, major renovations with permit, sale during the year, and a few other specific circumstances. Each exemption requires documentation.

The mandatory declaration

This is where most homeowners get caught. Every year, every Toronto residential property owner must file a Vacant Home Tax declaration — even if the property was occupied all year and no tax is owed.

If you don't file: the City automatically treats the property as vacant and issues a 3% tax bill. You then have to appeal and prove occupancy after the fact.

Filing deadline: typically the end of February each year, for the prior calendar year.

When VHT actually applies

Five real situations that trigger VHT:

1. Investor holding empty for appreciation

The "buy and hold empty" strategy doesn't work in Toronto anymore. At 3% VHT plus carrying costs (property tax, insurance, maintenance), you're paying 5-7% of property value per year just to hold it empty. The numbers don't work.

2. Pied-à-terre / part-time second home

If your Toronto home is your secondary residence and you use it less than half the year, it's likely subject to VHT. Some exceptions apply for snowbirds and seasonal use — but document everything.

3. Renovation in progress

If your home is gut-renovating and unoccupied for more than 6 months, you may be subject to VHT — UNLESS you have a major renovation permit AND construction is actively underway. The "I'm planning to renovate someday" excuse doesn't qualify.

4. Inherited property awaiting sale

Estate properties have specific exemptions in the year of death of the previous owner. After that year, normal rules apply. If the estate sits unoccupied for years awaiting probate or family disputes, VHT can apply.

5. Foreign-owned investment property

Combined with the federal Foreign Buyer Ban, foreign-owned vacant property in Toronto faces the most aggressive tax treatment in Canada. NRST on purchase + VHT on holding + Underused Housing Tax federally (1% of value annually). Total holding cost can exceed 5% of property value per year before regular taxes.

Closing gap risk

If you're selling your Toronto home and moving out before closing, the property may be vacant for a portion of the year. If the cumulative vacancy across the year exceeds 6 months, VHT could apply — to you, the seller, because you owned it during the vacant period.

Plan closing dates carefully. Coordinate move-out with your closing. If you're buying next, schedule your purchase close to your sale close to minimize gap.

How to appeal a VHT bill

If you get a VHT bill you don't deserve (because you forgot to file or the City made an error):

• File a Notice of Complaint with the City within 90 days of the bill.
• Provide documentation proving occupancy — utility bills, government correspondence sent to the address, vehicle registration, etc.
• The City reviews and either cancels the bill or upholds it.
• If upheld, you can further appeal to the Assessment Review Board.

The process can take 6–12 months. Filing the original declaration on time is dramatically easier than appealing after the fact.

What to do this week

• If you own residential property in Toronto, log into the City portal and confirm your declaration was filed for 2025.
• Set a recurring calendar reminder for the first week of February each year.
• If you have a VHT bill in dispute, gather documentation immediately and file the Notice of Complaint within 90 days.

For most homeowners, VHT is administrative — file the declaration, no tax owed. But the consequences of missing the declaration are real, and they're getting more common as the City processes more declarations.