Two similar-sounding taxes can cost you thousands if you miss a simple form. If you own a home or condo in Toronto, you now navigate both the City’s Vacant Home Tax and Canada’s Underused Housing Tax. It can feel confusing, especially if you split your time, own through a company, or rent seasonally. This guide breaks down the differences and gives you a clear checklist so you can file on time and avoid penalties. Let’s dive in.
Quick take: VHT vs. UHT
- VHT is municipal. The City of Toronto charges 3% of your property’s Current Value Assessment if it is vacant for more than six months, unless an exemption applies. All owners must submit an annual occupancy declaration. City program overview.
- UHT is federal. Canada’s Underused Housing Tax is 1% annually and targets certain owners of vacant or underused residential property. Only “affected owners” must file, but if you are affected you file even when you claim an exemption from paying. What UHT is and who must file.
What triggers each tax
Vacant Home Tax (Toronto)
A home is subject to VHT when it is not a principal residence and sits unoccupied for more than six months in the calendar year, unless an exemption applies. The six months do not need to be consecutive. Every Toronto residential owner must submit the City’s annual occupancy declaration. City VHT details.
Underused Housing Tax (Federal)
The UHT applies to affected owners who hold residential property on December 31. You may be exempt from paying if you meet conditions such as primary residence or qualifying occupancy, but you still must file if you are an affected owner. Review CRA’s categories for excluded and affected owners before you decide. Who is affected vs. excluded and who is exempt from paying.
Key dates to remember
- VHT declaration window for 2024 occupancy: November 1, 2024 to April 30, 2025. If you do not declare by the deadline, your property can be deemed vacant and assessed. The City planned to mail VHT bills June 1, 2025, with fall installment due dates. City declaration notice and program dates.
- UHT return due date: April 30 of the year after the calendar year you are reporting. For example, 2024 returns were due April 30, 2025. Minimum late-filing penalties are $1,000 for individuals and $2,000 for corporations. CRA when to file and penalties.
Your compliance checklist
A. Confirm what you own and how
- Identify each Toronto residential property by municipal roll number and address. (CRITICAL) City guidance
- List every ownership capacity for each property: individual, corporation, trustee, or partner. CRA treats each capacity separately. (CRITICAL) Affected vs. excluded owners
B. File your Toronto VHT declaration
- Submit the City’s annual occupancy declaration for every Toronto residential property within the stated window. Keep your confirmation. (CRITICAL) Declare here
- If your property was vacant more than six months, review City exemptions and gather proof such as leases, renovation permits, medical letters, or sale documents.
- If you disagree with an assessment, follow the City’s complaint process within the timelines and submit supporting documents. City reminders
- Budget for payment. VHT is added to your property tax roll and accrues interest if unpaid. Program details
C. Determine and file UHT (if required)
- Use CRA guidance to decide if you are an affected owner for each property and capacity. (CRITICAL) CRA guidance
- If affected, file a separate UHT return for each property by April 30. File even if you will claim an exemption. (CRITICAL) When to file
- Prepare evidence for exemptions: leases and rent receipts, proof of primary residence, medical or renovation records, and relevant travel or use records. Who is exempt from paying
- If tax is payable, arrange payment using CRA-accepted methods. Late filing or payment triggers penalties and interest. When to file
D. Keep tight records
- Maintain a folder for each property with declarations, confirmations, leases, rent receipts, permits, invoices, medical letters, death certificates, sale documents, correspondence, and proof of filing and payment. (CRITICAL) City reminders
E. Plan for sales and transfers
- VHT attaches to the property tax roll, so missed declarations can follow the property. Work with your lawyer and REALTOR to address VHT in offers and closing adjustments. Closing considerations
- For gifts, corporate reorganizations, or trust transfers, check whether exemptions apply and if UHT filing duties change. Ontario overview
F. Know when to get help
- Complex ownership, cross-border situations, or dual VHT and UHT exposure often call for specialized tax advice. The rules and definitions are specific. Who must file
Overlap to watch
Both regimes can apply to the same Toronto property. Being exempt from a municipal vacancy tax does not automatically remove federal UHT filing duties. Check each program separately to avoid missed filings. CRA reminder on overlap
Typical scenarios:
- Non-resident owners of Toronto homes often must file UHT and submit the City’s VHT declaration. Who is affected
- Canadian citizens with a second Toronto property are often excluded from UHT but still must file the City’s VHT declaration and may owe VHT if the home sits vacant more than six months. Affected vs. excluded owners
- Properties owned through trusts, partnerships, or corporations require extra care because CRA treats each capacity separately. Affected vs. excluded owners
Avoid common mistakes
- Skipping the City declaration and getting deemed vacant by default. City deadline notice
- Assuming a municipal exemption means you can skip UHT filing. CRA overlap reminder
- Missing the UHT deadline and incurring minimum penalties of $1,000 for individuals or $2,000 for corporations. UHT penalties
- Making false statements on VHT forms, which can lead to fines. VHT penalties overview
- Failing to keep evidence. Both the City and CRA rely on documentation to verify occupancy and exemptions. City reminders
Ready to simplify your plan? If you are buying, selling, or repositioning a Toronto property for long-term or seasonal use, align your strategy with VHT and UHT timelines. For a clear next step and market-savvy guidance, connect with Ryan Harkin for concierge-level support across Toronto and cottage country.
FAQs
In Toronto, what is the difference between VHT and UHT?
- VHT is a City tax focused on local vacancy with a required annual occupancy declaration, while UHT is a federal 1% tax that requires certain owners to file even when an exemption from paying applies. Learn more and CRA overview
Who must file the federal UHT return for a Toronto home?
- Only affected owners must file, which can include non-residents and some entities; many Canadian individuals are excluded, but check your ownership capacity to be sure. Affected vs. excluded owners
When is the City of Toronto VHT declaration due for 2024 occupancy?
- The City’s window ran from November 1, 2024 to April 30, 2025, and failure to declare can result in a deemed-vacant assessment. Declaration window
What are the penalties for missing the UHT deadline in Canada?
- Minimum late-filing penalties are $1,000 for individuals and $2,000 for corporations, plus interest on any unpaid tax. CRA penalties
Can both the City’s VHT and the federal UHT apply to the same Toronto property?
- Yes. Exemption or payment under one program does not remove your obligations under the other, so you must check and comply with both. CRA overlap reminder
