Ontario Vacant Home Tax: Exemptions, Declaration, and Penalties

Ontario does not have a vacant land tax in the literal sense. What people usually mean by that phrase is the municipal vacant home tax, which applies to residential properties left unoccupied, not to empty lots without a building. Five Ontario cities currently charge it: Toronto, Ottawa, Hamilton, Windsor, and Sault Ste. Marie. If you own a home in one of those cities and it sits empty for more than six months in a calendar year, you owe an extra tax on top of your regular property taxes, at rates between 1% and 3% of assessed value. Just as important, every residential owner in those cities has to file an annual occupancy declaration, and skipping it can trigger the full vacancy charge automatically.

Which Ontario Cities Charge a Vacant Home Tax

Five municipalities operate a vacant home tax as of 2026. Each sets its own rate and rules by by-law.¹

Toronto calls it the Vacant Home Tax. The rate is 3% of assessed value, effective from the 2024 tax year. It started at 1% in 2022 and 2023 before tripling.²
Ottawa calls it the Vacant Unit Tax. The rate escalates by one percentage point for each consecutive year of vacancy, up to a five percent cap.
Hamilton charges 1% of assessed value on residential units vacant for more than 183 days.³
Windsor operates a Vacant Home Tax program.
Sault Ste. Marie operates a Vacant Home Tax program.

Other Ontario municipalities have not adopted a vacant home tax, though the provincial framework allows more cities to be designated later.

What Counts as Vacant

A residential property is generally treated as vacant if no one occupies it for at least six months of the calendar year. Toronto adds a specific test for tenants: for occupancy by someone other than the owner to count, there must be a written agreement with a term of at least 30 days, totalling at least six months in the year.² Hamilton uses 183 days as its cutoff.³

The tax targets residential properties only. You do not need to declare, and are not subject to the tax, if your property is:

Vacant land with no structure on it
Assessed entirely as commercial, industrial, or multi-residential
A parking space or condominium storage locker

This is the point that trips people up. If you own an empty lot with no building, the municipal vacant home tax does not apply, though you still owe regular property taxes on the land.²

How the Bill Is Calculated

The tax is a percentage of the property’s Current Value Assessment, the value set by the Municipal Property Assessment Corporation. In Toronto, the 3% rate on a home assessed at $1,000,000 produces a $30,000 vacant home tax bill on top of regular property taxes.² The same property in Hamilton would generate a $10,000 bill at 1%.³

Ottawa’s structure works differently. A first year of vacancy is taxed at one rate, and each additional consecutive year adds another percentage point until the rate hits five percent. Owners who resolve a vacancy quickly pay less; owners who leave a unit empty year after year pay progressively more.

Exemptions That Can Eliminate the Tax

Even if a home sits empty past the six-month threshold, you may owe nothing if you qualify for an exemption. Toronto’s list is the most detailed and covers the categories other cities generally recognize as well:

Death of an owner, for up to three consecutive tax years from the year of death
The principal resident is in a hospital or long-term care facility for at least six months, available for up to two consecutive years
Major repairs or renovations that prevent occupancy, with all necessary permits issued and work progressing without unnecessary delay
Transfer of legal ownership during the year (a full sale, not a name change or the addition of a co-owner)
The owner or a spouse needs the unit for full-time employment in Toronto for at least six months while keeping a principal residence outside the Greater Toronto Area
A court order prohibits occupancy for at least six months
Vacant new inventory held by a developer, for up to two consecutive years

Each exemption needs documentation: a death certificate, building permits with evidence of active work, a signed letter from a care facility, and so on.²

Hamilton adds a couple of situations worth knowing about. Properties made uninhabitable by hazardous conditions or disaster damage outside the owner’s control can be exempt for up to two years if a licensed professional or city official confirms the condition. Model homes used only for sales in an active development are exempt, and newly built units are exempt for up to six months after the occupancy permit is issued.³

The Annual Declaration Every Owner Has to File

In each of the five cities, every residential property owner must file an annual declaration of occupancy status, whether the home is occupied or not. If you skip it, the city assumes the property is vacant and sends you a bill.

Deadlines for 2026 differ by city:

Toronto: April 30, 2026²
Ottawa: March 19, 2026, covering the 2025 occupancy year⁴
Hamilton: April 15, 2026, with late declarations accepted through May 15 for a $250 fee³

To file, you need identifiers from your property tax bill, usually the assessment roll number and a customer or access code. Most cities use an online portal as the main filing route; Hamilton also accepts declarations by phone, email, mail, or in person. If you are claiming an exemption, gather the supporting documents first. Municipalities can audit for several years after filing, so keep copies.

Penalties If You Miss the Declaration

In Toronto, a property is automatically deemed vacant when the owner misses the deadline, and the city issues a Notice of Assessment for the full tax. False declarations or refusing to provide requested information can add a fine of up to $10,000 on top of the tax. Interest of 1.25% applies on the first day of default and again on the first of each month the balance stays unpaid.²

In Hamilton, the late fee is $250 during the grace period from April 16 through May 15, 2026. After that window closes, the property can be classified as vacant.³ On a Toronto home assessed at $1,000,000, forgetting a form costs $30,000 plus interest and possible fines. Most of the owners who get burned are not people who left a home empty. They are people who didn’t realize they had to declare occupancy at all.

Disputing a Vacancy Bill

Every municipality with the tax offers a formal dispute route, and every one runs on strict deadlines. Miss the window and the bill usually stands.

In Toronto, you start by filing a Notice of Complaint through the city’s online portal. If the assessment came out of an audit rather than a missed declaration, you have 90 days from the date on the bill to file, and you may be asked to submit supporting documentation within 60 days. A denied complaint can be appealed to the Appellate Authority within 90 days, and that decision is final.²

Ottawa uses a two-stage system. A Notice of Complaint must be filed by September 15 for properties billed on the June tax bill, or within 90 days of the audit determination date. A successful complaint cancels the tax and any late penalties and can produce a refund. If the complaint is denied, a Request for Review is available as a second stage.⁵

The Federal Underused Housing Tax Is Separate

The federal Underused Housing Tax, introduced in 2022 as a 1% annual tax on the value of vacant or underused residential property, mainly targeted non-resident owners, private corporations, and trustees. Most Canadian citizens and permanent residents who owned their own homes were excluded from filing.⁶

The federal government has eliminated the UHT filing requirement and tax obligation for 2025 and later calendar years. If you filed UHT returns before, you no longer have to going forward. Owners with outstanding returns for 2022 through 2024 should still deal with them, because non-filing penalties started at $1,000 for individuals and $2,000 for corporations, per property, per year.⁶

The end of the federal tax has no effect on Ontario’s municipal programs. Toronto, Ottawa, Hamilton, Windsor, and Sault Ste. Marie continue to run their own vacant home taxes with their own rates, deadlines, and penalties.

1
Government of Ontario. Municipal Vacant Home Tax
2
City of Toronto. Vacant Home Tax
3
City of Hamilton. Vacant Unit Tax
4
City of Ottawa. Complete Your Vacant Unit Tax Declaration Before March 19
5
City of Ottawa. Appeals – Process
6
Government of Canada. When to File the Return and Pay the Tax – Underused Housing Tax