To help create more rental units in the city, Toronto is on the verge of establishing a one percent tax on the value of empty houses.
The goal of this tax twofold. The first goal is to incentivize landowners to rent their properties or to sell them, so they don’t remain vacant. The second side of this tax will hopefully bring in more city revenue which can be put towards affordable housing projects.
This one percent tax may not sound like much, but it could be as much as $10,000 per year if the house is worth $1 million.
The goal of announcing that the tax is on the way is to incentivize homeowners to rent out their existing empty units before 2022. For the time being, the city is unaware of how many homes are left empty in Toronto, but it’s hoping to discover once the tax is put in place and an audit is carried out in 2023.
The publication Storeys says that a similar tax in Vancouver suggests that Toronto’s empty housing tax could net anywhere from $55 to $66 million in revenue every year. The publication also notes that in Vancouver’s first year implementing the tax, the number of empty houses dropped by a fifth.
It will take around $11 million to start this incitive in Toronto and then cost $3.1 million each year to keep running.