A row of houses in Toronto on July 12, 2022. City staff unveiled details of a revamped model of its vacant-homes tax on Tuesday.Cole Burston/The Canadian Press
Toronto is looking to revamp how it runs its vacant-home tax after a debacle last year that saw thousands of residents incorrectly told to pay big fines.
On Tuesday, city staff unveiled details of what it said was an improved and more user-friendly program. If approved by council, the plan is to have multiple direct mailings, information in more languages and advertising that can be ramped up if public participation is seen as lagging.
“Once you declare, you won’t hear from us again,” said Beth Waldman, the city’s interim chief communications officer. “But if you don’t declare, we’re going to keep nudging you. We’re going to keep communicating with you so that homeowners have the information they need.”
The tax, which is in its third year, is based on homeowner declarations of whether their property is occupied or vacant. It charges a percentage of the assessed home value for properties left unoccupied more than six months, with a number of exemptions for things such as renovation or illness. The tax was set at 1 per cent in its first two years and is rising to 3 per cent this year.
The goal, according to the city, is to encourage people to use, sell or rent out their properties. While the number of homes declared vacant did drop from the first to second year, that success was overshadowed by a blizzard of complaints about the program.
Many people evidently did not understand that they had to declare their home’s status every year. By not declaring, their homes were deemed vacant and a fine assessed. Other people did declare and were fined anyway.
The declaration process was also complicated and city data show many people started but did not finish it. For those who did complete, they received no official confirmation that they had successfully declared.
The problems led to a wave of criticism. Councillors were inundated with complaints, in some cases receiving upward of 1,000 angry phone calls. The city eventually reversed erroneous fines.
At a briefing for media, Toronto chief financial officer Stephen Conforti acknowledged problems with the way the tax was administered last year.
“While we’re asking property owners to support this program, it’s imperative that city staff design a program that makes it as easy and as accessible as possible,” he said.
One of the main changes in the plan staff are proposing to council is an increase in the number of channels through which people can declare the status of their home. Options would include an online portal, a verbal declaration over the phone and doing it in person at city hall and civic centres. There could also be pop-ups at, for example, condo buildings with low participation rates.
The time frame during which people could declare would also be extended by two months and would run from the start of November to the end of April. Mr. Conforti said the first of these dates was chosen to catch snowbirds before they go south for the winter and the latter date to coincide with the tax-filing deadline.
Those who declare would get a confirmation that they had done so.
The changes would add administration costs to the program. It cost about $3.2-million to run the program last year and would cost an estimated $5.8-million under the new approach, according to Mr. Conforti.
But city councillor and budget chief Shelley Carroll said the program could become cheaper to run as residents become accustomed to making an annual declaration.
“If we do our job right over these first few years to communicate this, then certainly we’re going to see people just sort of internalizing that it’s coming to the end of the year, it’s time to declare,” she said.