Every couple of years we seem to see Toronto increasing their municipal land transfer tax (LTT) on luxury properties.  It happened back in 2024, when increased rates were imposed upon sales in Toronto of properties over $3M, and it’s just happened again.

As of April 1, 2026, we have new rates for the LTT on the sale of properties over $3M in Toronto.  The provincial land transfer tax has not made any similar changes at any point, but the city of Toronto is rapidly increasing the cost to buy within the Toronto boundaries.

We looked at the anticipated increased revenue the city would make when they did this back at the start of 2024, we said they’d bring in about $27M in additional revenue as a result of the increases.  That sounds like a pretty significant amount, but keep in mind that back in late 2023, the City of Toronto’s updated Long Term Financial Plan and staff report showed an estimated $1.5 billion starting pressure for the 2024 operating budget and $29.5 billion in capital needs, which both form part of a $46.5 billion shortfall over the next 10 years.  The forecasted $27M would have brought in less than 2% of the amount needed to address the operating budget shortfall.

Given the city remains in difficult financial circumstances, it is clear that the increased tax didn’t help in a material fashion.  The latest increase is actually going to be far less impactful, as it is mostly increases of around 1%  for those higher price bands.

Let’s look at the new changes and how much additional money it could bring in – plus how many deals need to be lost as buyers decide to purchase their high end homes outside of the city.

Apples to apples.

We’re primarily focused on resale properties in our team and the data we can access is largely limited to residential resale properties.  As such, all of our analyses below are based on that data.   We’re after some broad (but accurate) implications of the new LTT rates, but we aren’t considering:

• non-MLS transactions
• builder/direct new-home and new-condo closings
• commercial / industrial / multi-residential / vacant land transfers
• other taxable conveyances the City records but that do not show up in our records

While some of the specific numbers of the implications of the new LTT rates will be understated, our analysis does paint a clear picture of what it means to the resale market.  Now that we’re officially covered, let’s get into it.

First, a history lesson.

We’ve created a handy chart to show the recent history of the Toronto Land Transfer Tax.  The orange column is what it was for about six years, and the blue columns show the rate increase amount that was put into place as of January 1, 2024.  The green column is the brand new rate increase amounts that apply to properties bought in the city as of April 1, 2026.

There have been no changes made to the land transfer tax due on the purchase of any properties up to $3M, but if you’re at that level or higher, we saw it go from a flat rate of 2.5% on any amount above the $3M level, to a graduated system.  The higher the price point, the higher the rate you’re paying on that portion of your purchase.

The latest round of increases have added about 1% to most of the price bands, with a range from 0.9% to up to 1.1%.

It’s all marginal.

A reminder that the land transfer tax is a marginal tax bracket, which means that for any price above a threshold, you pay:

• The full tax from all lower brackets
• Plus the tax on the portion that falls inside the current bracket

For example, a $1.2 million purchase does not pay 2.0% on the full $1.2 million. Instead, it pays:

• 5% on the first $55,000 = $275
• 0% on the next $195,000 = $1,950
• 5% on the next $150,000 = $2,250
• 0% on the remaining $800,000 = $16,000
• Which would bring the total municipal land transfer tax to $20,475.

This is relevant as we look at what impact these higher tax brackets will have on the sales taking place moving forward.

The past ain’t the future.

A caveat we often give is that what happened in the past is not necessarily indicative of what will happen in the future.  That being said, we need to base our analysis on certain assumptions, so the big assumption in our analysis here is that we’ll see similar types of transactions and numbers of transactions in 2026 as we did in 2025.  Here’s how the 23,475 sales in the city of Toronto were spread across the various price bands.

A few things about the above data are very relevant to our review.

First, 97% of the sales that took place in Toronto in 2025 were under $3M, which means the change that just took place is utterly irrelevant to those sales.  The Toronto LTT rate for these properties has not changed since 2017 and they can go merrily about their business.

The next thing worth pointing out is that the 740 sales that were in the $3M plus price bands last year were mostly in the $3M to $5M range.  59% of the sales were in the $3M to $4M band and another 22% were in the $4M to $5M band, so over 80% of the sales were in that $3M to $5M range.

If we assume that 2026 will see a similar spread of deals as we saw in 2025, how are these higher land transfer tax rates in those price bands going to bring in to the city in increased revenue?

It’s more, but it’s not a lot more.

We pulled the average price for each of the price bands for the sales in 2025 and then calculated the Toronto LTT for each of those bands.  This is relying on averages within each price band so it will not be 100% accurate, but it is enough to give us an idea of what 2026 will look like for increased revenue with the new increased LTT rates.

The city would have brought in about $450M in municipal land transfer tax in 2025 based on these sales.  With the new higher rates for the higher end price points, that means an estimated revenue for 2026 of about $458M, which works out to about $8M more in land transfer tax revenue for the city.

As we see very few sales at the $5M or above price point, the bulk of this $8M comes from sales in the $3M to $5M range.

$8M is still better than a kick in the pants, right?

The final aspect of the new LTT tax rates worth discussing is the fact that our model makes the assumption that the same level of sales take place in Toronto despite increasing costs for those buyers.  While it may be unlikely that a lower price point buyer will choose to buy outside of the city to save on the land transfer tax, we have had clients who considered the difference in closing costs significant.

At the higher price points that this latest round of LTT rate increases impacts, the difference between what you pay in Toronto versus surrounding municipalities amounts to significant dollars.

For example, a $5 million buyer in Toronto would pay about $272K in total LTT, of which $112K is the provincial portion.  If the buyer chose to purchase instead in another city such as Oakville, they would save $160K on their closing costs.  That’s a significant amount of money and while the latest increase in Toronto’s LTT rates doesn’t materially change the amount they pay, it is reaching levels that could result in some buyers deciding they’d rather put that money into a home purchase outside of Toronto.

While it is complicated to project how many lost deals it would take for the city to not see that projected $8M increased LTT from high end sales, we know that any purchase that moves outside of the city loses the entirety of the MLTT, not just the portion at the higher end.  Our calculation is that it would take about 67 of these high end deals leaving the city for that projected $8M in extra LTT revenue to disappear completely.

We regularly work with buyers and sellers impacted by decisions like this latest Toronto LTT rate increases, and it’s important that your agent understands the factors that influence the high end and luxury market in the city.  If you’re looking to buy or sell in the $3M plus range and want agents that understand how that segment actually works, get in touch!

If you read the newspaper headlines and follow real estate news on your feed, you may have the impression that now is a terrible time to own a condo.  That perception is driven by the fact that many investors as well as would-be investors have decided to realize their profits (or cut their losses) and put their condo up for sale.

It’s hard to argue against the idea that is a bad time to sell a condo, as over supply – particularly of the one bedroom or studio apartment type – has put downward pressure on condo prices for most of the last couple of years.

While we’d agree it is a challenging time to sell condo apartments, that doesn’t necessarily mean that it is a bad time to own a condo unit.  Condo apartments make up 65% of the housing stock in Toronto, and given Toronto has a population of around 3.2 million people, there over two million people who own condos in the city.  With our population density and price of real estate, condo units have been (and remain) the lowest priced way to get onto the property ladder in Toronto.  Yes, condo prices have dropped in the past couple of years, but that is also true for the market as a whole.

In May, 2024, we saw the average price for a condo unit in Toronto hit its two year high, coming in at about $776,000.  Over the course of a bit more than a year, we saw it drop down to a two year low of $673,000.  As of the start of December 2025, our average price for a condo is now $698,000.  As of right now, we’re up $25,000 from our two year low, and down $77,000 from our two year high.

For the market as a whole, the highest average sale price in the past two years in Toronto was also in May 2024, when we hit an average sale price of approximately $1,199,000.  Compare that against January 2024, where Toronto saw our lowest average sale price of about $952,000.  That means that in the past couple of years we’ve seen prices for the market as a whole fluctuate by about $247,000.

Our current average price of $1,060,000 means that we’re up $108,000 from our two year low, and down $139,000 from our two year high.

The numbers show that owning a condo right now is better than it has been in the worst of our recent market shifts (to the tune of about $25K), so we’d say condo owners are doing OK.

If it is a bad time to sell a condo, an OK time to own a condo, what sort of timing is it for buying one?  With a couple of caveats, we think right now (December 2025) is a great time to buy a condo.  Here’s our reasoning.

Desperate times call for…taking what you can get.

While seasonal cycles may be less reliable in our real estate market in the past number of years, we still encounter a winter slow down every year.  In 2023, 2024 and 2025, October was the last hurrah in terms of number of sales for the remainder of the year.  We always see fewer sales, lower prices and less new listings as we head towards the end of the year.

Sellers who have been trying to get rid of a condo unit for weeks or months view the upcoming winter months with dread.  They know that showings will slow to a trickle and carrying costs will continue to mount.  If it is an investment property that has been vacant for more than six months this year, then they are also likely facing a 3% vacancy tax from the City of Toronto.

Put bluntly, the end of the year (and the first month of a new year) are excellent opportunities for buyers.  If you can close quickly, your agent can put lots of pressure on a seller to have them accept a much lower offer than they would have even considered a few months ago.

Renting isn’t looking so hot right now.

When getting a good sale price is hard to do, condo owners who aren’t in need of the capital in the property can choose to rent it out.  This has traditionally been the lifeline for those condo owners who aren’t able to get the price they want or need in order to move forward with a sale.

The challenge with that approach right now is two-fold.  First, winter is not just a slow time to sell properties – it is also a difficult time to rent a place.  Whether it is the holidays, the logistical challenges of physically moving in cold, snowy weather or the short days, winter is the hardest season to rent a property.

The second challenge has to do with the state of our condo rental market, which has dropped noticeably for condo landlords.  Asking rents in Toronto are down 2.9% year-over-year to an average of $2,592 and the City of Toronto’s secondary condo rents fell 3.8% year-over-year in Q3 2025 (to about $2,714 for a 675-sf unit).  As stories of the condo market troubles proliferated, a number of potential sellers of condo units decided to keep them and rent them out.  As a result, competition has intensified as supply has grown and tenants have more choice.

On the new purpose-built rental side of the equation, professional rental companies have begun offering incentives such as a free month rent or parking to attract tenants.  This has further impacted the resale rental condo market, which is typically older than the purpose-built rentals.

If we combine all of the above, it means that the rental option is not that desirable for a number of condo sellers.  This is in addition to the fact that some condo owners urgently need the capital in the property due to financial issues and cannot afford to keep the unit even if they can rent it out.

The future’s so bright, I’ve got to wear shades.

We have a bad habit in Toronto where we assume that whatever is happening to real estate will continue to happen forever.  If prices are going up, then they will always go up.  If properties aren’t appreciating, then they will be worth the same in five years as right now.  Given the price drops we’ve seen over the past couple of years, most of Toronto seems to be falling into the “whatever it’s worth now, it will be worth less later” trap.

The reality is that real estate markets fluctuate and that the trend for prices move right along with it.

Take a look at the below chart which shows the average price for a property in Toronto over the past two years.  This includes both freehold as well as condo units, but the same fluctuations occur in the condo segment.  Prices go up and down on a month to month basis and while the average always creeps higher over time, we have seen periods of two to four years of lack of growth before prices increase.

While prices may fluctuate, when the perception is that prices are going to go down, buyers hold off on making a purchase.  When that perception continues and economic issues can further uncertainty, we end up with a situation where the number of buyers is greatly exceeded by the number of sellers.  This has arguably been felt across the entire Toronto real estate market, but it has most strongly impacted the condo segment.

As a result of this perception, we started seeing a slow down in 2022 of the sales of new condo projects.  They began to decline in mid-2022 and by the following year, that slow down had worsened.   Urbanation reports that 2023 condo construction starts fell 45% in 2023 compared to 2022, and the second half of 2023 was down 72% year-over-year, meaning far fewer projects actually broke ground.  By 2024, the slowdown became severe and Urbanation reported that condo apartment construction starts dropped 50% to a 25-year low.   CMHC says 2024 condo-unit cancellations in Toronto were more than five times the number in a typical year (such as 2022) and Urbanation’s latest survey counts 32 condo projects cancelled since the start of 2024 plus 20 more that are on hold or in receivership.

Things have not improved in 2025, and the new-build condo market has posted multi-decade lows, with the lowest sales since 1995, with only 2,176 units sold year-to-date, which is a 28-year low.  Cancellations set a new record this year, with 18 projects (about 4,040 units) having been cancelled completely.

It takes three to four years for a condo project to go from ground-breaking to occupancy, which means that our 2023 slow down will result in 2026/2027 seeing very few new condo projects hitting the market.  Over the course of the next couple of years, we’re predicting that the current state of the condo market will reverse, with fewer condo units available for sale as the lack of new inventory means older resale inventory is basically the only option for condo buyers.

If we’re conservative, we would say that 2027 or 2028 is when resale condo prices will begin rising.  As buyer sentiment shifts based on the scarcity of available units, new construction projects will begin selling out again, which means by 2030 or later, new condo projects will be coming onto the market and prices will steady out.

In the very short-term (December 2025, January and February 2026), there are great opportunities to buy a resale condo from a seller who has experienced few showings and little interest.  Throughout the course of 2026, further opportunities will become available, driven by economic news and the strength (or weakness) of our economy.  In 2027, the lack of new condo projects coming on the market will start to shift buyer sentiment and bargains will disappear.

If you’re thinking about buying a condo and have a three to five year timeframe of holding it, then we’d love to help you get a great bargain – or two!  If that sounds good, please reach out to us so we can show you specific opportunities we’re seeing out there!

The majority of our clients are both buying and selling real estate, often within the same city. They’re moving because of a change to their family, their work or their financial circumstances – and the home they’re in just doesn’t cut it anymore.

We went back and looked at the hundreds of deals we’ve done with clients and the city with the highest number of sellers actually moving to another part of Ontario or Canada is Toronto. It’s the biggest city in Canada and also where we’re based, so that’s not exactly shocking news, but it’s three times more common than other cities when we review our transactions. We do a lot of deals in Peel, York and Durham, but those clients are much more likely to be moving within the city they live in rather than moving away.

So, why is it more common for people to leave Toronto? Is it because they’re sick of hearing two-hour marathon chants of “Go Jays Go!” or because they want some distance from the annual disappointment of the Leafs being knocked out of the playoffs?

In our experience, these clients decide to buy outside of the city because it makes sense to them, because it fits with what they want in a home, in a neighbourhood, and in a lifestyle.

Let’s look into the reasons why people chose to move out of Toronto.

Home Prices

We know, this is an obvious one. As of October 2024, if you want to buy a home in Toronto, the average price is $1,166,000.

Compare that against the nine other largest cities in Ontario.

• Ottawa: $693,700
• Mississauga: $1,032,000
• Brampton: $972,000
• Hamilton: $798,500
• London: $645,000
• Markham: $1,273,000
• Vaughan: $1,189,000
• Kitchener: $742,000
• Windsor: $450,000

While Mississauga isn’t much cheaper – and Markham and Vaughan are actually a little bit more expensive than Toronto – there are lots of large cities in Ontario where your real estate dollar goes a lot further. We had a client who sold their one bedroom condo in Toronto this month and for not much more they have bought a high end townhouse in London.

Land Transfer Tax

This one isn’t always as readily apparent to buyers as the cost shows up late in the purchase process. In every part of Ontario, the purchaser of a home has to pay a land transfer tax to the province of Ontario. If you buy in Toronto, you also have to pay a land transfer tax of approximately the same amount to the City of Toronto.

If we use an apples-to-apples comparison, a $1M property in Toronto will cost $32,950 in land transfer taxes. The same property anywhere else in Ontario will result in land transfer taxes of half of that amount, which is a savings of $16,475.

As well, we should point out that the formula for land transfer tax is tiered so that lower-priced properties pay less tax. With Toronto’s average price of $1,166,000 and the double land transfer tax, buying the average property in the city will have you pay $39,950 in taxes.

Compare that to the other bigger cities in Ontario if you bought the average priced property and you’ll see the land transfer tax paid is significantly less.

• Ottawa: $693,700 average price, which means land transfer tax of $10,874
• Mississauga: $1,032,000 average price, which means land transfer tax of $17,390
• Brampton: $972,000 average price, which means land transfer tax of $16,090
• Hamilton: $798,500 average price, which means land transfer tax of $12,970
• London: $645,000 average price, which means land transfer tax of $10,225
• Markham: $1,273,000 average price, which means land transfer tax of $22,460
• Vaughan: $1,189,000 average price, which means land transfer tax of $20,230
• Kitchener: $742,000 average price, which means land transfer tax of $11,810
• Windsor: $450,000 average price, which means land transfer tax of $6,475

Even if you’re spending the same money as you would in Toronto, you will pay half the amount in land transfer taxes, so it definitely is a significant cost savings.

Family

Another reason clients choose to move out of Toronto is family. Whether it’s access to high-ranked schools, kids’ community programs, or proximity to aging parents, sometimes moving out of Toronto just makes life easier.

The influx of residents to Toronto means that schools, intramural sports, daycare, and other community resources and activities are oversubscribed and hard to get into easily or at an affordable cost. The lower land prices outside of Toronto can translate into more affordability for municipalities to build extra schools and daycares, and the lower density means less pressure on those resources that are in place.

Cost of Living

According to the 2023 Mercer Cost of Living survey, for the second year in a row, Toronto is the most expensive city in Canada in which to live.

Mercer ranked 227 global cities across five continents and Toronto sits 90th globally, having dropped one spot from last year’s ranking. Vancouver remains the second most expensive city in Canada and slid eight places to 116th in the ranking. Montreal fell 10 spots to 135th, Ottawa moved down five spots to 137th and Calgary, the last Canadian city on the list dropped four spots to 145th.

The good folks at WOWA have a cost of living calculator you can access here.

If we use that calculator and look at London, Ontario as an example, it makes even more sense why our client chose to move out of Toronto, with the cost of living in London being 14.7% lower than in Toronto. Housing is the biggest impact in terms of cost, coming in at 25% lower in London, but clothing, furniture and healthcare is also almost 15% lower in London than Toronto.

If you’ve ever marvelled at how easy it is to find free parking in smaller cities or towns, or paid a new fee to use a municipal service, you understand that living in a big city like Toronto comes with a lot of additional daily costs that add up over time.

Traffic

We can’t avoid what is quickly becoming the biggest annoyance in Toronto, as well as the most universally agreed upon statement, traffic is just terrible in the city now.

At the start of 2024, a new traffic index report from geolocation firm TomTom was released, using data compiled from over 600 million in-car navigation systems and smartphones. The company measured how long it takes, on average, to drive ten kilometres in various cities around the world and Toronto placed third out of 387 cities around the globe — and first in North America — for having the slowest traffic in 2023.

In Toronto’s city centre area, it took an average 29 minutes to drive 10 kilometres in 2023 — an increase of 50 seconds, nearly a minute, from last year. This makes Toronto traffic the slowest in North America, topped only by London and Dublin in first and second place, respectively.

Overall, the average Toronto driver loses around 255 hours to commuting every year. Rush hour traffic accounted for roughly 98 of these hours, when Torontonians were recorded driving at an average 18 km/h, the report found.

With the rise of remote work, it’s not surprising that people who can do the same job without being in Toronto are choosing to live somewhere with less traffic. It dramatically impacts your quality of life and makes everything harder to do. Whether it’s buying groceries, going out for dinner, visiting friends or family – it takes longer to get where you’re going and to get home afterwards.

If you’ve been considering making a move out of Toronto, than talk to us about your options. We have a network of trusted agents across Ontario and most parts of Canada and we’re of course happy to help you sell your home here in the city!

Whether we’re selling a house or a condo or helping clients buy a property, we often end up talking about bedrooms. How many bedrooms, what type of windows they have, size of the closets and so on.

As a result of that, about once a week we have a conversation with a client about the definition of a bedroom. After all, when we’re working with someone to buy or sell real estate, the number of bedrooms matters a great deal. Is it a three bedroom house, plus den, that is too small for a prospective buyer with three kids? Or is it a four bedroom house that is just right? How you define a room and whether it is in fact a bedroom, or just a den, matters.

Given the impact that number of bedrooms has on the value of a property, we took it upon ourselves to find out the exact definition. If you think it’s about windows, or closets, or doors, you might be surprised at the answer.

Let’s look at how a bedroom is defined in Canada, in Ontario, in Toronto and by our local real estate board.

Canada: A Nation United by Minimum Bedroom Standards

Starting at the country-wide level, the National Building Code mostly takes a hands-off approach, leaving the details to provinces and municipalities. It does provide clarity on a few things, such as the size required for it to be a bedroom. Seven square meters is the magical number, so if your room’s smaller than that, it’s more of a den than a bedroom. Canada’s national rulebook doesn’t care about closets and there is no requirement at the national level for a bedroom to have a closet.

Ontario: The Province of Spacious Ambitions

Zooming in to Ontario, things don’t change much. The Ontario Building Code sticks to the same philosophy: dimensions, dimensions, dimensions. The 7-square-meter rule applies province-wide but it also clarifies that the ceiling height needs to be 2.3 meters.

When it comes to windows, the OBC is less clear, so while it does say that “every room used for sleeping in any building, and every principal room such as living room, dining room or combination of them in dwelling units shall be provided with windows”, that is a little confusing. Basically, all bedrooms need to have windows, but also every principal room, which means…all rooms? By that standard, any interior room can’t be a…room?

Even the Residential Tenancies Act gets into the discussion, requiring every bedroom to have a window, but then it says that window can be part of a door. The end result seems to be you can’t have a room without ventilation of some sort, be it a window, a door or even some sort of mechanical ventilation like a fan. Given we haven’t yet encountered a magical room that somehow exists as a room without a door or doorway, this seems like a meaningless stipulation.

Toronto: The Big City with Even Bigger Bedroom Standards

In Toronto, where space is at a premium, the definition of a bedroom is shockingly straightforward. A bedroom in Toronto is really just a room with:

• Space to lie down: It needs to be at least 7 square meters (about 75 square feet), so if you can’t fit a twin bed in there without turning it into a game of Tetris, it’s probably not a bedroom.
• Headroom: The ceiling height has to be at least 2.3 meters (about 7 feet, 6 inches) for half of the room. If you’re constantly crouching, you might just be living in a glorified closet.
• Escape hatch: There has to be a window big enough to climb out of in case you want to make a quick exit—5.7 square feet of window space, to be exact. So, no trying to pass off your windowless broom closet as a bedroom.
• Breath of fresh air: Natural light and ventilation are a must. So, if your “bedroom” feels like a dungeon with no windows, it’s time to reconsider your floor plan.
• Closets? Optional! If you’re in Toronto, storage space is more of a “nice to have” than a legal requirement.

Toronto Regional Real Estate Board: That’s None of Our Business

We spoke with the good folks at the Toronto Regional Real Estate Board (TRREB), as they run the MLS system that displays listings in Toronto and a large part of the GTA. They confirmed that they do not have an official definition of a bedroom that Realtors must follow and that we should check with local municipalities to make sure we’re accurate in describing a room in a listing as a bedroom.

The Bottom Line: It’s All About the Space (and the Window)

In the end, calling something a bedroom boils down to this: Can you fit a bed in it, stand up without hitting your head, and get out if you need to? If the answer to all three is yes, then it likely qualifies as a bedroom. There is definitely no need for it to have a closet to qualify as a bedroom, so you can drop that fact at your next cocktail party with confidence!

Understanding the rules (or the basics of them) is useful but doesn’t change the fact that it is a bit of a wild west situation in many real estate markets, with listing agents playing fast and loose with the number of bedrooms in the home. If you are looking for a new home and want to make sure that see places with actual bedrooms instead of theoretical bedrooms, get in touch with us!

There’s a new municipal tax for homeowners in the City of Toronto and it’s focused on vacant homes.  If you are a homeowner in Toronto, you’ve likely already received a yellow notice about this and we thought we’d answer a few questions we’ve been getting from our clients in the city.

Let’s get into it.

What is it?

It’s a tax on vacant homes in the City of Toronto that came into effect in 2022 and it’s in the news now because the first declaration on vacancy status (for 2022) is taking place in 2023.

What makes a home “vacant” for the purposes of this tax?

The definition of vacant is pretty clear.  A property is considered vacant if it was not used as the principal residence by the owner(s) or any permitted occupant(s), or was unoccupied for a total of six months or more during the previous calendar year.

That’s a total of six months, so cumulative use, not consecutive.  If you spent a month away from the home every season, it’s not vacant.  If you spend most of the winter somewhere warm, make sure you don’t also spend your summers at the cottage or technically you could end up qualifying as a vacant home.

Investors need not worry about the tax, as tenants are absolutely occupying a property.  If you have a property vacant for more than six months between tenants though you will incur this tax, unless you qualify for an exception such as undergoing repairs or renovations.

Any exceptions to this tax?

There are a few specific exemptions.

The most basic is that this is a tax on residential properties and a declaration is not required if it doesn’t contain a residential unit (for example, vacant land, parking space or condominium locker).  Commercial properties with no residential component also don’t have make a declaration.

The other most likely specific exemptions we’re seeing are the death of a registered owner, repairs or renovations taking place at the property, the principal resident being in a care facility or the transfer of legal ownership during the year.  In all cases, there is supporting documentation required, so make sure you determine if you actually qualify.

How much is it?

The tax is 1% of your home’s current value assessment or CVA.  You will see your CVA on your annual property taxes, and it is assessed by the Municipal Property Assessment Corporation (or MPAC).  MPAC

is an independent, not-for-profit corporation that assess and classify all properties in Ontario according to the Assessment Act and regulations established by the Ontario Government.

Due to COVID, the Ontario government postponed the 2020 Assessment Update, which means that any people paying the vacancy tax for the 2022 tax year will be doing so based on the fully phased-in January 1, 2016 current values.  Those 2016 values were actually determined by MPAC during the year prior, which means that the “current” value assessments being used are actually coming up on 8 years old!

Considering that the average price for a home in Toronto at the end of 2015 was $627,032 and as of the end of 2022 it was $1,050,788, whatever tax revenues the city realizes will be considerably understated until MPAC catches up with the CVAs.  We say considerably understated, but by those numbers, the average price has gone up 67% since then, so perhaps we should say tremendously understated!  By using these older CVAs, the city will receive, on average, $6,270 for someone paying the tax.  When new CVAs are in place, that number will go up to $10,507 on average.

When is it due?

The first declaration is due by February 2, 2023 and you have to declare whether your home is vacant or not, so don’t think this is just something for people who don’t live in their property.  In fact, the City states that “properties may also be deemed (or considered to be) vacant if an owner fails to make a declaration of occupancy status”, so make sure you take the time to submit your declaration.

You can submit your declaration online via the below link.

https://www.toronto.ca/services-payments/property-taxes-utilities/vacant-home-tax/vacant-home-tax-declaration-of-occupancy-status/

In terms of the actual payment, any owners of properties subject to the VHT will be issued a Notice in April, 2023 and payment will be due by May 1, 2023.

How are they actually checking this?

A common question that we’re hearing from clients is, how will the city actually be checking to see if a property that was declared as occupied is actually occupied?

The short answer is that like many taxes, the obligation is on individuals to accurately report their situation to the government.  In theory, the city may be conducting random audits but given the city is planning on only hiring 25 people to both administer the new tax and audit compliance, that seems unlikely to take place.

As with other taxes, compliance can also be verified based on specific audits triggered by complaints, but with this tax, that seems unlikely.  We can’t picture neighbours calling in to the city to ask if the house down the street is registered as vacant because no lights have gone on for a few weeks.  There may be scenarios where property damage occurs with police or fire called in and that reveals that a supposedly occupied home is in fact vacant, but we’ll have to see how it plays out this year.

Any new tax can take a bit of time and effort to understand, but the Toronto Vacant Home Tax is relatively straight forward once you review it.  Given that Peel and other municipalities are considering similar taxes, and the tax rate will likely increase as it is established, it is worth taking the time.

If you have a vacant property and you’re thinking that paying 1% of the (admittedly out of date) current value assessment sounds like a bad plan, get in touch and we’ll help you get it sold.