Tax Bulletin: Toronto increases Municipal Land Transfer and Vacant Home Tax rates
Most Torontonians were planning to ring in 2024 with champagne and resolutions. Accounting for a spate of tax increases on some properties were not on their New Year’s agenda—although that is the costly reality. The City of Toronto is introducing new Municipal Land Transfer Tax rate thresholds for higher value residential properties. The new rates will apply to properties containing at least one, and not more than two, single family residences and will not be grandfathered.
That means the rates will apply to any applicable transaction “upon which Municipal Land Transfer Tax otherwise becomes payable” that closes on or after January 1, 2024. The current Municipal Land Transfer Tax rates will continue to apply for other categories of properties such as vacant and commercial properties and apartment buildings.
The following are the current and new MLTT thresholds that apply to affected higher value residential properties:
| Value of Consideration for Single Residential / Duplex | MLTT Rate |
| Current Thresholds and MLTT Rates | |
| Up to and including $55,000 | 0.5 per cent |
| Over $55,000 and up to $250,000 | 1 per cent |
| Over $250,000 and up to $400,000 | 1.5 per cent |
| Over $400,000 and up to $2,000,000 | 2 per cent |
| Over $2,000,000 and up to $3,000,000 | 2.5 per cent |
| Additional thresholds and rates effective as of January 1, 2024 | |
| Over $3,000,000 and up to $4,000,000 | 3.5 per cent |
| Over $4,000,000 and up to $5,000,000 | 4.5 per cent |
| Over $5,000,000 and up to $10,000,000 | 5.5 per cent |
| Over $10,000,000 and up to $20,000,000 | 6.5 per cent |
| Over $20,000,000 | 7.5 per cent |
In addition, Toronto announced that it would increase the Vacant Home Tax to 3 per cent per year—from the current 1 per cent—for 2024. For example, the owner of a $3 million property that is “declared, deemed or determined to be vacant for more than six months during the previous year” would be required to pay $90,000 under the increased Vacant Home Tax, unless the property qualifies for an exemption.
Note that residential property owners are required to submit a declaration of occupancy status every year, or the property could be deemed vacant.
The tax does not apply to:
- Properties that are the principal residence of the owner
- Properties that are the principal residence of a permitted occupant or occupied by a tenant (including business tenants)
- Properties that qualify for an exemption
For more information about Toronto’s new municipal tax rates, contact a member of our team.
Armando Iannuzzi, Co-Managing Partner
