Toronto and Ottawa have instituted a municipal Vacant Home Tax at a rate of 1% of assessed value. The Vacant Home Tax will apply starting in respect of the 2022 year. Other municipalities and regions are considering similar provisions including in Hamilton, Durham, Peel and York Region. The tax is levied in respect of properties that are vacant for more than 6 months in a year. Exemptions apply for such things as renovations with building permits, absences for LTC stays, certain transactions, etc. All property owners will be required to declare occupancy each year before February 2nd in Toronto and March 16 in Ottawa in respect to the prior year. In Toronto, the declaration process will be online, opening mid-December 2022. The declarations and properties are subject to audit and unpaid levies will form lien on the property. The Vacant Home Tax will impact purchase and sale transactions of residential properties in the municipalities where it applies. A purchaser will need assurance from a seller that the seller has complied with the declaration requirements and paid any applicable levies. If levies are unpaid by a seller, the buyer may become liable for the levies after the transaction; and, the property may be subject to a lien for enforcement. This can be a significant liability; 1% of a property assessed at $1M will amount of $10,000.00 plus any interest and penalties. It is unclear at this stage if title insurance would provide a benefit to defray the liability. It is also unclear at this stage if information in respect to declarations made by property owners will be ‘searchable’ at the municipality as part of due diligence taken by a lawyer on behalf of a purchaser (as we do in respect of realty tax, building permits, work orders and zoning, etc.) We are now making requisitions on title to be on behalf of a purchaser; and considering the satisfactory closing productions that a vendor should provide and a purchaser should obtain before closing.