Vacant Home Tax in Peel - on hold

A vacant home tax (VHT) is applied to homes that are vacant for more than 184 days in a calendar year and are not exempt. A VHT is a tool that can be used in municipatities facing challenges related to housing. These challenges can include rising home prices and limited availability of homes for sale or rent.

There are several approaches that can be explored by municipalities to address the affordability crisis they face, and a VHT is one of them.

How vacant home tax could work for Peel

There’s a housing affordability crisis in Ontario including Peel. Calculations show that it would take the average family 30 years to save a large enough down payment for current home prices and 50 years for a family earning minimum wage. Research and real-world experience suggest that a VHT is one of many tools that can contribute to easing the affordable housing crisis in the shorter term.

By implementing this tax, Peel Region may be able to encourage owners of vacant properties to either sell or rent out their empty units. This would create more supply of available units which could lower average property sale and rent prices.

While not mandated by legislation, all municipalities that have implemented, or are considering, the VHT have pledged to use collected revenues to increase housing supply and support housing initiatives:

• Rent relief programs.
• Building and maintaining affordable housing.
• Providing grants to non-profit organizations to assist the community.

Public consultation and program design

In April 2022, Peel launched community consultation activities for the public to provide input into the development of a potential VHT program in Peel to increase affordable housing supply. 

Feedback from the public consultations helped us make informed decisions related to the design of the VHT program and are a key component in the submission to the Ontario government to seek a designated authority to implement a VHT in Peel Region.

Ernst & Young LLP (EY) used those findings to complete their report, recommend a VHT program design and develop a program delivery model. The report maintains that a VHT would be a feasible housing policy and revenue positive tool for implementation in Peel Region to help address affordable housing challenges.

The recommended Peel VHT program design includes an initial tax rate of 1 per cent, a VHT declaration and audit process, and seven categories of exemption which is consistent with other municipalities that have implemented a VHT. A VHT is only applied to homes that are vacant for more than 184 days in a calendar year and are not exempt.

Vacant Home Tax Program on hold

Bill 112, Hazel McCallion Act (Peel Dissolution), 2023 received Royal Assent on June 8, 2023 and has initiated a process to dissolve Peel Region effective January 1, 2025. The Council-approved VHT program delivery model assigned the majority of core responsibilities to the Peel Region, while local municipalities would be responsible for some functions. The associated feasibility analysis was based on a Regional program model. Details of the Peel Dissolution including matters as they relate to Regional roles and responsibilities are not known at this time. On July 6, 2023, Regional Council approved a staff recommendation to pause VHT efforts including a hold on submission to the Ontario government requesting a designated authority to implement VHT in Peel.

Questions related to the Vacant Home Tax can be emailed to us.