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Toronto plans to change its vacant home tax. Here’s what you need to know

City staff are proposing changes to Toronto’s vacant home tax that they say will make the process simpler for homeowners after last year’s rollout generated tens of thousands of complaints.

Toronto Mayor Olivia Chow said the program should be better once the changes are adopted. She said she has been assured by staff that the proposed changes will revamp the program to help to avoid a repeat of the problems last year. She said the city needs the funds from the tax to provide affordable housing.

City staff are recommending extending the deadline for declaration of occupancy status to April 30, simplifying the declaration process and enhancing communication. Staff said in an email on Tuesday that the changes are expected to reduce the number of late declarations. 

“The rollout should be a lot smoother and less traumatic,” Chow told reporters on Tuesday. “The staff cannot fail, the city cannot fail. Because what the people experienced last year was terrible. It’s heartbreaking. It’s scary.”

The tax, adopted in 2021, is meant to increase housing supply in Toronto by discouraging homeowners from leaving residential properties unoccupied. But the rollout of the tax in its second year was “fundamentally flawed” with unrealistic deadlines, Chow said.

In a Sept. 17 report to the city’s executive committee, city staff said the program for the 2023 tax year generated more than 169,000 complaints.

About 108,000 vacant home tax charges on property tax bills were reversed of April 12, according to another report.

This year, city staff are planning a communications blitz to make homeowners aware of the tax. They are also proposing to make filling out the paperwork easier both online and over the phone. And they are proposing the creation of a dedicated team to help people complete the process.

A boarded up home.
A boarded-up vacant home is shown here on Adelaide Street in the city’s West Queen West neighbourhood. (Patrick Morrell/CBC)

Stephen Conforti, chief financial officer for the city, said mistakes were made last year.

“We really didn’t do a good enough job communicating the need for an annual declaration,” Conforti told reporters at city hall.

Conforiti said the city also didn’t have direct mailings, and homeowners may have been more aware of the program in its first year as opposed to its second year.

According to a news release on Tuesday, the program is expected to generate about $55 million at the current rate of one per cent of assessed value.

‘Crucial’ problems are fixed, budget chief says

Coun. Shelley Carroll, budget chief for the city, said it is “really crucial” that the vacant home tax program works properly and the problems from last year are fixed. She said the program should be a “no brainer” and that it is time to “mature the program” so that it is a success.

“So this year, people are going to hear: ‘It’s time to declare, here’s the reason why we need you to declare and it’s going to be easier to declare,'” Carroll said.

Rental units are pictured in Toronto on Jan. 12, 2024.
Rental units are pictured in Toronto on Jan. 12, 2024. (Evan Mitsui/CBC)

Carroll also defended the need for the tax, saying it’s being used to address the housing crisis.

“We are going to do everything we can to fix this, because we do need to do this to create those homes. And so people will know that they are helping the City of Toronto put a roof over people’s head, just by doing this one thing every year.”

The proposed changes will go to the city’s executive committee at its Oct. 1 meeting. Then the changes will go to council at its Oct. 9 to 11 meeting.

Proposed changes you need to know about

If the changes are approved by council, the vacant home tax program will start on Nov. 1, 2024 and run to April 30, 2025. 

Property owners will be able to declare the occupancy status of their homes through a revamped portal that will be launched in November.

In a news release on Tuesday, the city said homeowners will be able to declare their occupancy status “in a format that works best for them,” including online, in person at city hall and civic centres, and over the phone through 311, with support from a customer care cente.

“The revised program will ensure a smoother and more efficient experience for Torontonians who, through annual declarations, are a key part of helping the City address its current housing crisis. These changes will also ensure that no homeowner will receive any billing related to VHT, unless they are specifically determined as vacant in accordance with the VHT program by-law,” the Sept. 17 report says.
 

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