Handling Vacant Home Tax or Vacant Unit Tax (ON)

Handling Vacant Home Tax or Vacant Unit Tax (ON)

Many cities across Ontario now have a tax on vacant homes. Toronto, Ottawa, Hamilton, Windsor, and Sault Ste. Marie all introduced a Vacant Home Tax or Vacant Unit Tax to encourage homeowners to sell or rent their empty properties, helping to increase the housing supply.

Realti helps you manage the process of including this information within your transaction. When the issue is activated, it automatically adds the applicable Vacant Home/Unit Tax wording to key documents like your Initial Letter to Vendor and Initial Letter to Purchaser while providing options on adding wording to your Requisition Letter, and Response to Requisitions.

Adding the Appropriate Wording to Documents

In Realti (Ontario), we updated the Issues list to include Vacant Home/Unit Tax, which provides the fields you need to add text to various documents in your file.

To add the Vacant Home/Unit Tax item to your file follow these steps:
  1. Navigate to the Issues list by clicking + to the right of Issues on the left navigation panel.


  2. Click Vacant Home/Unit Tax located under the Tax Issues heading.


  3. When you select this issue, the Issues WorkBench will open, allowing you to add more details to the file. It also makes it easy to add text to documents and make any necessary adjustments. If necessary, you can also add specific details about the tax assessment, including any amounts due or penalties.

Within the Issues WorkBench, we provide standard clauses for the Requisition (purchase file), the Response to Requisitions (sale file), and the Reporting Letter. While this pre-filled text is a great starting point, you can easily customize it to fit your needs.

To change the text, just select the list icon within each action item to access a variety of pre-written options. You can also click directly into the text box and manually type any changes you would like to make.

For details on changing the text for documents in the Issues WorkBench, refer to this article. It covers the Issues WorkBench in more detail and explains how you can set document clauses in the Action List.

Specific Impacts to Realti Standard Documents

The Vacant Home/Unit Tax issue item provides standard and alternative clause text for the documents available from the Action List, and the Adjust/Payout option will add the adjustment into the Statement of Adjustment or Trust Statement screen (and corresponding document), as applicable.

The list below shows the documents that are affected by the Vacant Home Tax and Vacant Unit Tax, along with the clause text.

Document Name
Condition
Clause Text
Vendor - Initial Letter


















Added if Vacant Home/Unit Tax issue in file















The [Name of Municipality] has passed a Vacant Unit/Home Tax by-law that requires all owners of "Residential Units" to file an annual occupancy declaration to confirm the occupancy status of the Property in the prior year. Property that is vacant for more than 6 months in the prior year will be subject to a tax of 1% of the property's value in the current year. Although the tax does not apply to a principal residence, the requirements to file an occupancy declaration also applies to a principal residence.


In order to facilitate the completion of the sale of the Property please ensure that you have filed the requisite occupancy declaration for the Property and provide us with that filed copy as soon as possible.
Vendor - Initial Letter



Added if Vacant Home/Unit Tax issue in file

[Number]. Copy of [Closing Date] Occupancy Declaration filed with the [Name of Municipality]


Undertaking, Warranty, Direction and Declaration - Vendor's




Added if Vacant Home/Unit Tax issue in file (Note: Underlined text is added to the document)



[Number]. pay all realty taxes (including interest penalties and any re-assessments of the property) and utility accounts owing for services, with respect to the Property, up to the date of closing as well as the full amount of any vacant home/unit tax and any interest late filing fees or penalties charged against the Property.
Undertaking, Warranty, Direction and Declaration - Vendor's


Added if Vacant Home/Unit Tax issue and tax is not applicable


[Number]. the Property was not vacant (as defined by the Vacant Home/Unit Tax by-law for the [Name of Municipality]) in the calendar year prior to the year in which the completion of the sale of the Property has taken place.
Undertaking, Warranty, Direction and Declaration - Vendor's

Added if Vacant Home/Unit Tax issue and tax is applicable

[Number]. the Vacant Home/Unit Tax levied or to be levied against the Property has been paid or credited to the Purchaser on the statement of adjustments.
Undertaking, Warranty, Direction and Declaration - Vendor's

Added if Vacant Home/Unit Tax issue



[Number]. the information contained in the occupancy declaration filed with the [Name of Municipality] a copy of which declaration has been provided to the Purchaser is true and correct.



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