Toronto takes steps to address vacant home tax confusion

Toronto is taking steps to resolve confusion that has resulted from the rollout of the vacant home tax this year, Mayor Olivia Chow and budget chief Shelley Carroll say.

Tens of thousands of residents, who claim their properties were occupied last year, have complained to the city after they received a vacant home tax notice of assessment for the 2023 tax year.

Some homeowners have said they forgot to declare the occupancy status of their residential properties before the March 15 deadline, while others have said they filled out the declaration in time and were billed by the city anyway.

The city says the notices were sent to residential property owners who either declared their property vacant or did not make a declaration of occupancy status for the 2023 tax year before the deadline. This week, however, the city has acknowledged that many notices were sent in error.

In a letter to city council on Friday, Chow and Carroll said residents whose homes were occupied at least six months of 2023 do not have to pay a late declaration fee of $21.24.

Chow and Carroll said city staff have already reversed 62,500 vacant home tax charges as of Friday morning and there is an "urgent need" for the city to clarify and waive the fees associated with late or missed declarations charged to residents.

'We have to do better'

"Adopted by city council in 2021, the vacant home tax is an important policy tool to discourage desperately needed homes from sitting empty during this national housing crisis. This tax is designed to be paid only by speculators and to encourage investment property owners to make homes available for people to live in," Chow and Carroll said in the letter. 

"However, this year's rollout has led to owners of occupied homes receiving bills in error, causing undue stress and anxiety. We have to do better."

The tax is intended for homeowners who choose to keep their residential properties vacant. The city has said the measure is meant to increase the supply of housing by discouraging homeowners from leaving residential properties unoccupied amid a housing crisis.

City staff have implemented measures to respond to complaints, Chow and Carroll said. They include:

• Doubling the number of staff available to support in-person inquiries.
• Extending in-person support at city hall and civic centres until at least April 12.
• Expediting a mailing to affected property owners to inform them they do not have to pay if their property was occupied for at least six months in 2023, and how to appeal the charge.
• Coordinating revenue services and 311 to support residents better.
• Updating the vacant home tax website across multiple languages.

The mayor and councillor said they will recommend at the next city council meeting that city staff ensure residents billed in error don't have pay the late declaration fee.

"We will also ensure that the payment and processing dates are fair, and request that the city manager update council members on a comprehensive communications plan for the 2024 tax year that considers the experience of seniors, residents experiencing barriers to internet access, and multilingual communications," the letter reads.

Many received bills in error

At a news conference at city hall on Friday, Carroll said the city is "very aware" that the vacant home tax process has been difficult and many people received bills in error.

"We think this is an extraordinary year in that a number of bills went out to homes that we're now hearing are occupied," Carroll said.

"We'll do our best to make sure that this becomes a smooth implementation because we know that every Torontonian wants to see an end to the housing crisis. And this is very much a part of making sure that that happens," she added.

Carroll said there seems to be an error in the system that led to people who declared in time being billed in error and it is being investigated.

Coun. Josh Matlow, who represents Toronto-St. Paul's, said in a post on X, formerly Twitter, that the city needs to improve how it implements the tax.

"The vacant home tax is a useful tool to incentivize bringing investment properties back into the housing market. However, I believe the method the city uses to identify vacant homes needs improvement and their response to those who simply miss making a declaration is too punitive," he wrote on Wednesday.