By Grant Matossian
Welcome to my new monthly column in Torontohye! Here, I will be writing about current trends in taxation, passing along helpful information, and identifying programs you can take advantage of while preparing your tax returns or making decisions about your everyday finances. I am happy to hear from you with suggestions of topics you would like to see discussed in this column.
This month, I will cover two topics. The first is the municipal Vacant Home Tax for Toronto property owners, which was introduced for the 2022 calendar year. All Toronto property owners are now required to declare the occupancy status of their Toronto homes. Properties that don’t qualify will be required to pay a one percent tax on the Current Value Assessment (CVA) of that property. For example, if a property value is $1 million, the vacant tax would be $10,000, a hefty fine. This tax allows the government to control foreign ownership and increase the housing supply by discouraging owners from leaving their residential properties unoccupied.
There are three statuses’ of homeowners that will not have any tax applied when declared. They are:
- Properties that were used as principal residences by the owner during the year;
- Properties that were used as a principal residence by an occupant or tenant during the year;
- Properties that may qualify for an exemption, Some exemptions include but are not limited to the following:
- Death of the registered owner of the property;
- There were repairs and renovations done to vacant land;
- The principal resident was in a care facility.
So what makes a property vacant? If the property was not used for the above reasons for at least six months out of the year.
What do property owners have to do to comply? They have to log in online with the slip provided by the Municipal Government and declare their property status with one of those described above, or they will be responsible for the vacancy tax.
You must declare the status of your property by Feb. 2 to avoid a $250 fine. If you falsify any documents and prepare deceptive statements to avoid the vacant home tax, you will be fined between $250 to $10,000 on top of the tax you are required to pay.
The second topic I will cover in this installment is the Canada Housing Benefit, which was recently introduced. Those who apply should know that the application window is open only until March 31.
According to Canada Revenue Agency (CRA), the one-time top-up to the Canada Housing Benefit aims to help low-income renters with the cost of renting. You may be eligible for a one-time tax-free payment of $500 if your income and the amount that you pay on rent qualify.
The eligibility requirements are the following:
- The applicant must be at least 15 years of age on Dec. 1, 2022;
- The applicant’s principal residence was in Canada on Dec. 1, 2022;
- The applicant was a resident of Canada in 2022;
- The applicant (and their spouse or common-law partner, if they have one) has filed their 2021 income tax return or statement of income;
- For single applicants, their adjusted net income threshold must not be over $20,000; for couples, it cannot be over $35,000;
- Eligible rent paid in 2022 equals or exceeds 30 percent of the applicant’s adjusted family net income.
Applicants have three options to apply for this benefit. The first is to apply through their My CRA Account (five to 10 business day turnaround time). The second is through their My Service Canada Account (five to 10 business day turnaround time). If they don’t have any of these accounts, they can fill out an online application form (six to 11 business day turnaround time). They can also apply by phone by calling 1-800-282-8079, but keep in mind that lines may be quite busy!
Don’t delay, and apply if you qualify! And remember, if you have any questions or have a suggestion for a future topic, please email me at email@example.com.