Toronto is an ever-changing city and with change comes tax. The City of Toronto has recently implemented a new tax for vacant home buyers—but don’t panic just yet! If you are curious about how this new tax will affect your purchase decision, read on to learn all you need to know about the Vacant Home Buyer’s Tax.
The Vacant Home Buyer’s Tax (also known as the Empty Homes Property Tax) is a tax levied by the City of Toronto on homes that are left vacant for long periods of time. It’s part of a larger effort to discourage investors from buying properties and leaving them vacant while simultaneously driving up rent prices. Basically, it’s a way to encourage developers and buyers to actually use their properties instead of leaving them empty.
Who does this tax apply to?
The Vacant Home Buyer’s Tax applies to anyone who owns property in Toronto for more than six months out of any twelve-month period and leaves it unoccupied during that time. This includes both residential and commercial property owners, as well as landlords who own multiple units but keep some vacant for longer than six months at a time. The tax does not apply if the property owner can prove that they were using their space for business or personal reasons during that period.
How much is the Vacant Home Buyer’s Tax?
The Vacant Home Buyers’ Tax rate is 1% of the taxable value of your property per year. So, if you own a property valued at $500,000, you would be subject to an annual fee of $5,000. It’s important to note that this fee is only applicable if your property remains empty for more than six months at a time—otherwise, it won’t be charged at all!
Navigating taxes can be tricky—especially when it comes to something like the Vacant Home Buyer’s Tax in Toronto. But don’t worry! By arming yourself with knowledge about what qualifies as “vacancy” and what doesn’t, you’ll be able to make informed decisions when purchasing or renting out property in Toronto without running afoul of the law. With these tips in mind, you’ll have no problem navigating taxes associated with owning real estate in Canada’s biggest city! Happy house hunting!