Toronto Vacant Home Tax: Did It Work Out as Intended?

In 2022, the City of Toronto introduced the Vacant Home Tax (VHT) in response to the housing shortage that residents are facing. The idea was not 100% original, mind you. Vancouver first implemented the Empty Homes Tax (EHT) in 2017 in response to growing demand in a market where supply just could not keep up.

It wasn’t long before other cities followed suit. Toronto was second, Ottawa was third, and at the time of this writing, both Hamilton and Sault Ste. Marie have also jumped aboard the VHT train.

The idea is to ease the severe housing crunch by either incentivizing homeowners to sell their properties or to open them up to tenants. While many people support the idea of improving housing affordability and availability, there is naturally some aversion to policies like the VHT.

Like it or not, here in 2026, it seems that the tax is here to stay. That’s why, today, we’ll explore the topic in more detail and answer some of the questions you may still have about the Toronto Vacant Home Tax.

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What Is the Vacant Home Tax?

The simple answer is that if you have a house in Toronto that no one lives in for more than six months of the year, it is considered vacant. If you choose to keep your home vacant, you’ll now be subject to an annual tax (The VHT), with that revenue intended to fund affordable housing initiatives.

There are some exceptions depending on your circumstances. Vacant Homes Tax Exemptions include:
If a registered owner passes away or goes into long-term care
The property is undergoing major repairs that prevent occupancy (and all permits have been issued)
The owner or their spouse is employed full-time outside of Toronto for six months or more
The house is a secondary residence for medical reasons.

Even if your home is not vacant or qualifies for an exemption, you still need to make a statement of declaration by the end of April each year. Late filing could result in an administrative fee, or worse, the city could deem your property as vacant, and you could be subject to the VHT even if you live there.

The VHT is just one reality of homeownership in Toronto in today’s market. To learn even more nuances, check out the posts below:

How Much Is the Vacant Home Tax in Toronto?

The VHT rate was originally introduced at 1% of the home value. However, the city has since increased the rate to 3% as of 2024. Given the high property values as assessed by the Municipal Property Assessment Corporation (MPAC), that can add up to a pretty substantial sum!

Can You Avoid Paying the Vacant Home Tax?

Normally, taxes are one of only two certainties in life. The Vacant Home Tax is a bit of a different animal, however. You can avoid it altogether if your situation falls under one of the approved exemptions and by filing your declaration with time to spare.

Alternatively, you might choose to rent out the property, sell it, or allow a family member to move in for at least six months of the year. If you find yourself spending time and money to maintain an empty house that no one is using, selling may be the best course of action.

If you decide to list and sell your home, the posts below can help you earn the maximum results:

How Many Vacant Homes Are in Toronto?

According to the city’s website, the number of vacant homes has dropped from 6,944 to 5,989 over the three-year period starting from 2022 to 2025. If you want to skip the math, that’s a decrease of 955.

Has it made a massive difference in the lives of Toronto residents? 955 homes barely moves the needle when you consider the population of more than 3 million people.

Perhaps it’s a positive start, although it’s difficult to determine how many of these came on the market because of the VHT. And to create a real, lasting impact, municipal, provincial, and federal governments will have to work to vastly increase not just the supply of homes, but also to improve affordability for the younger generation of buyers.

Do you have questions about buying or selling a house in Toronto? Our Toronto luxury real estate agents are happy to guide you through your next steps. Reach out to ana@asantos.ca or call us at 416.575.7317 to learn more.