Toronto's vacant home tax: City staff proposes redevelopment

City of Toronto officials are proposing to completely overhaul the vacant home tax program and eliminate bills for thousands of undeclared properties after declaring a “deficiency” and unfair “penalty.”

In an action report released April 12, to be considered at next week's council meeting, Chief Financial Officer Stephen Conforti noted problems with the 2023 tax year returns, particularly in how it handled notifying homeowners of the filing requirement. the status of the property each year, as well as the challenges associated with the Vacant Home Tax (VHT) program “particularly the timing, billing and declaration requirements and reliance on the Notice of Claim process to resolve properties deemed vacant after the declaration period”.

That's why several city departments are conducting a comprehensive review “to inform a complete restructuring of the program.” Staff said it will explore all options to improve the filing process, focusing on using existing data to streamline the filing process, updating its communications strategy, allowing more time to file returns, and empowering staff to delay billing. and the payment period should not be inconsistent with the objectives.

Officials noted a 15 percent drop in returns between the 2023 and 2022 tax years, with 80 percent of the roughly 816,000 residential properties filing them.

Several Torontonians have been hit with a surprise tax bill after failing to file their vacant home tax returns for 2023, prompting the city to declare their units unoccupied.

The deadline for declaring the residence status of their place of residence was initially set for February 29, but was later extended to March 15.

This tax charges homeowners one percent of the value of their property if it is vacant for more than six months in a calendar year. For tax year 2024 and each year thereafter, the rate is three percent.

After the deadline, the city deemed more than 167,000 properties vacant, leaving owners to rely on the Notice of Claim process to notify them of their vacancy status — a period that will remain open until the end of the year.

Following immediate, increased private support, the report said on Friday afternoon property tax bills had been refunded by around VHT 108,000, increasing the declaration rate to 93% of all residential properties.

Of the remaining 58,000 properties currently considered vacant, city staff estimate more than 80 percent were occupied last year based on their 2022 status, meaning they are not subject to VHT payments.

This prompts city staff to ask the council to confirm that the owners of these properties did indeed own them in the previous year so that they are not required to file a return or notice of claim for the current tax year. If approved, these owners will then be sent a notice confirming the residential status of their residence and refunding their VHT payments.

“Right the wrong”

12 districts. Josh Matlow earlier this month called the declaration process “flawed, clumsy” and unfairly “punitive”, noting how it shows how useful the idea is but poorly executed.

“Our job is to guide and direct city staff to provide a process that is fair, clear, reasonable and doesn't punish someone when they don't know how to do something,” Matlow said.

Mayor Olivia Chow said the proposal, which offers immediate fixes including waiving late filing fees, has “caused confusion, anxiety and frustration to thousands of Torontonians,” highlighted the program's “obvious” flaws and said the city will now fix it. .

“A lot needs to be done to fix the mess this year and ensure a fair delivery next year.” Budget Chief Carroll and I have asked city staff to provide an additional report to City Council on this item on this year's $21 late fee waiver, speaking to affected Torontonians and saying that if your home is vacant, you don't have to pay and reconsider. program design for next year, including the ability to use utility data to improve the system,” Chow wrote.

1 in a separate movement from the county. Vincent Crisanti, who is calling on the council to immediately scrap the VHT program, noted that it was not only “invasive to our taxpayers” but “disruptive” and “irreparably embarrassing”.

The regular meeting of the city maslikhat will be held on April 17.

CP24 with Codi Wilson files