City staff propose cancellation of vacant home tax
Toronto city staff want to cancel vacant home tax bills for 48,000 still-undeclared properties and “completely revise” the annual billing system after a disastrous spring rollout.
In a report to city council for next week’s meeting, chief financial officer Stephen Conforti acknowledges that the process for taxing owners of homes that were vacant in 2023 — which saw the city mail multi-thousand-dollar tax bills to more than 100,000 owners of occupied homes — was “very challenging for both residents and members of council.”
City staff across multiple divisions are reviewing what went so wrong in the second year of collecting the levy, which is aimed at increasing Toronto’s housing supply, and will recommend to city council a host of fixes before bills go out next spring for the 2024 tax year.
Initial objectives include giving homeowners more time to declare their properties vacant or occupied, a system to confirm their declaration via email or text, boosting efforts to notify homeowners, possibly including robocalls and mass advertising, and use of data such as utility bills, “where feasible or permitted, to support declarations.”
The new collection system will be informed by input from individuals impacted this year, especially seniors, people whose mother tongue is not English and those without ready internet access.
Mayor Olivia Chow, in a motion proposing immediate fixes, including waiving late fees for everyone who failed to declare the status of their home before the March 15 deadline, called this year’s rollout an unfair “mess” that “caused confusion, anxiety and frustration for thousands of Torontonians.”
Owners of about one in five Toronto homes missed that declaration deadline, triggering the issuance of demands for vacant home tax payments, ranging from a few thousand dollars to more than $15,000, to about 167,000 Torontonians. That triggered panic, confusion, a barrage of calls to city councillors’ offices and long lineups of bill-clutching residents at city hall and civic centres wanting help with the complaint process.
Publicity over the problem and increased city staffing and hours has led to reversal of about 108,000 tax bills, pushing compliance to 93 per cent, still short of the 95 per cent achieved in spring 2023 with the first round of declarations that many residents didn’t know must be repeated annually.
Of the roughly 58,000 homes currently deemed vacant, city staff believe that about 48,000 were in fact occupied last year, based on prior year declarations. They want city council approval to automatically cancel those bills and mail each of those homeowners another notice that lets them declare vacancy if the property should in fact be subject to the tax, which is one per cent of a home’s assessed value.
In Chow’s motion, she says she still supports the tax, which aims to reduce the number of homes sitting empty, often while speculators wait for increased prices or redevelopment, and which city staff estimate will raise $55 million in revenue. Waiving late fees would cost the city an estimated $850,000.
In a separate motion, Coun. Vince Crisanti (Ward 1 Etobicoke North) calls on council to scrap the vacant home tax immediately, calling it ”not only invasive to our taxpayers, but it is also disruptive and inconvenient beyond repair.”
This article was first reported by The Star
