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Toronto to retain vacant home tax despite errors resulting in numerous incorrect invoices

Toronto’s city council has voted to keep the vacant home tax despite concerns over the program “fiasco” where thousands of bills were wrongfully issued.

The vacant home tax was introduced in 2022 as a way to ease the housing crisis by encouraging owners not to leave their properties unoccupied. For 2022 and 2023, the tax is 1 percent of the current property value assessment. That number will be increasing to 3 percent in 2024 and subsequent years, the city says.

With the program in its second year, thousands of homeowners—some of whom live in their homes—received a vacant home tax bill even though the property was occupied.

“The past weeks have caused confusion, anxiety and frustration for thousands of Torontonians,” Mayor Olivia Chow wrote to the city council on April 10.
During the April 18 council meeting, councillors heard that over 160,000 vacant tax bills were sent out, yet only 11,000 of those homes were unoccupied.

“The design of the program was approved December 2021 and is clearly flawed. This has caused hardship, especially for seniors who can’t access online tools or those who cannot read English. How we administer the Vacant Home Tax program must be rebuilt from scratch,” Ms. Chow said.

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“The Vacant Homes Tax needs to be administered in a simple, fair way. People need to know now that if their home was occupied last year, there is no need to pay. The charges will be canceled with no late fee.”

The Canadian Taxpayer’s Federation (CTF) said the tax needed to be scrapped and called on Ms. Chow to get rid of it.

“Toronto’s vacant home tax has been a complete fiasco,” said CTF Ontario Director Jay Goldberg. “Taxpayers in every corner of the city have wrongly received massive tax bills and it’s time to recognize that a vacant home tax is not the answer to Toronto’s housing affordability problems.”

CTF said that about 167,000 vacant home tax bills were sent out, representing about 20 percent of homes in Toronto.

Councillor Vincent Crisanti made a motion to cancel the tax, which was voted down 18–5, something he called “disappointing” in a post on social media.

“While I had the support from several of my colleagues, it is disappointing we could not make the change we believed in,” he said in an April 18 statement on X, formerly Twitter.

“It is clear that the vacant home tax rollout has touched property owners in a very emotional way and stirred up deep rooted anger,” he added.

Mr. Crisanti said the vacant home tax was not a “housing solution policy” but an “unfair and unnecessary burden.”

Ms. Chow said the program needed “major changes” and signaled the entire process would be reformed next year.

“The Vacant Home Tax is meant to make more homes available for people. But it’s clear the program as it was designed in 2021 needs major changes,” she said in an April 18 post on X.

“As mayor, I am committed to making sure this tool to tackle the housing crisis achieves its goals,” Ms. Chow added.

Vancouver brought in a similar tax, called the Empty Homes Tax, in 2018, which now sits at 3 percent.

The tax has brought down the number of vacant properties by 54 percent, according to a 2023 City of Vancouver report. It has also brought in $142 million in revenues, which has been redirected to affordable housing projects, the city said.
However, two homeowners challenged the tax in August 2023, saying it violates the Charter of Rights and Freedoms and should be declared invalid, according to a report from the Globe and Mail.

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