Vacant Home Taxes are municipal taxes applied to the assessed value of vacant homes. These taxes are intended to increase housing supply by creating an incentive for property owners to sell unoccupied homes or make them available to be rented.

Ontario extended the authority for all single- and upper-tier municipalities to impose a tax on vacant homes, effective March 27, 2024. Municipalities that choose to implement a Vacant Home Tax will be supported with a Provincial Policy Framework, which provides best practices and clarity about the expected elements of municipal Vacant Home Taxes, and promotes consistency in their application.


In order to provide clarity for municipalities related to the expected elements of proposed municipal Vacant Home Taxes, as well as to promote consistency in the application of such taxes, this Provincial Policy Framework sets out provincial recommendations based on best practices related to municipal Vacant Home Taxes, as outlined in:

This framework contains guidelines and recommendations for municipal Vacant Home Taxes. Municipalities are expected to follow the policy intent and recommendations as a measure to increase the supply of housing available in their respective jurisdictions.

Although the framework is not legally binding, the framework is subject to any provisions of the Municipal Act, 2001, City of Toronto Act, 2006 and regulations which are applicable to a municipal Vacant Home Tax.

Provincial Policy Framework

Recommended exemptions and definition of vacancy

The Municipal Act, 2001 and City of Toronto Act, 2006 state that municipal Vacant Home Taxes may apply to residential units that are classified in the residential property class under the Assessment Act and are taxable under that act for municipal purposes. Vacant Home Taxes are taxes on assessed value collected under Part X of the Municipal Act, 2001.

It is further recommended that:

  • only self-contained residential units that are suitable for residential habitation be subject to Vacant Home Taxes
  • no Vacant Home Tax be payable by a property if any of the following circumstances apply:
    • It is a principal residence.
    • It is rented out and occupied as a residence by a tenant for at least 6 months of a taxation year.
    • It was owned by a registered property owner who has died in the applicable reference year / tax year.
    • It is owned by a registered property owner who is in care (for example, institutionalized or hospitalized).
    • Ownership of the property was transferred in the reference year / tax year (where the year of sale or transfer is the reference year / tax year).
    • It is undergoing major redevelopment or renovations that, in the judgement of the municipality, are being pursued within a reasonable timeframe.
    • It is subject to a court or municipal order prohibiting occupancy and the owner has made reasonable efforts to remedy the circumstances that led to the order.
    • It is a seasonal property (including properties that are classified by Municipal Property Assessment Corporation as falling under property codes 363, 364, 385, 391, 392, and 395).
    • It is otherwise uninhabitable for reasons beyond the owner’s control.
    • Other circumstances identified by a municipality as representing an appropriate use of a residential property (for example, a municipality may wish to exempt properties required for occupation for employment purposes).

Tax rate

The applicable legislation does not set out any requirements related to the tax rate for Vacant Home Taxes.

As context, for the 2023 tax year, Toronto and Ottawa both imposed 1% Vacant Home Tax rates.

Application to foreign-owned vacant homes

The province is committed to improving alignment of incentives to help ensure availability of housing to Ontario families, through tools such as municipal Vacant Home Taxes and the provincial Non-Resident Speculation Tax.

The province will work with municipalities to explore ways of identifying foreign-owned vacant homes, and to encourage imposing a higher Vacant Home Tax rate on such properties.

Tax year, tax collection and administration

It is recommended that a municipality imposing a Vacant Home Tax should establish a process for confirming the occupancy status of properties in the reference year.

Vacant Home Taxes should be imposed on the Current Value Assessment of properties in the reference year during which occupancy status is determined.

For example, Vacant Home Taxes collected in 2024 should be based on 2023 Current Value Assessment.

Appeals and dispute resolution

It is recommended that a municipality imposing a Vacant Home Tax should establish processes for appeals and dispute resolution related to the imposition of Vacant Home Taxes.

Public consultations

A municipality seeking the authority to impose a Vacant Home Tax should conduct consultations on the implementation of potential Vacant Home Taxes. It is further recommended that the feedback received and results of these consultations be shared with the province to help inform best practices going forward.

Annual reporting

In order to support evidence-based evaluation of outcomes, a municipality imposing a Vacant Home Tax should include data related to its Vacant Home Tax in its annual Financial Information Return, according to the fields provided for relevant data (for example, total number of properties impacted, total revenues, etc.).

Upper tier and lower tier responsibilities

In the case of municipalities with an upper tier and lower tier system of government, it is recommended as a best practice that:

  • upper tiers receive supportive statements or endorsements from lower tiers, including approaches to ensuring that lower tiers will be able to retain revenues sufficient to offset their costs of Vacant Home Tax collection and administration
  • upper tiers be responsible for setting out key aspects of a Vacant Home Tax, such as rates and definition of vacancy
  • upper tiers adopt Vacant Home Tax bylaws that specify in which lower tiers the Vacant Home Tax will be in effect, and in which lower tiers it would not be