What to Do With a Parent's House When They Move Into Care in Toronto

When a parent moves into care, the family home rarely gets decided in a day. Working out what to do with a parent’s house when they move into care in Toronto means choosing between three paths: sell it now, rent it out or leave it empty for a while. None of them is wrong. Each one carries its own City of Toronto, Ontario and federal tax rules. Some of those rules start counting from the month your parent leaves.

This guide walks through each path in plain terms. It is general information. Please confirm your own situation with an accountant, a lawyer and the agencies named below.

If your parent can no longer sign documents, someone else will need legal authority before any of these choices can be carried out. Our guide to selling a parent’s house with power of attorney in Ontario explains who can sign and how.

The three choices side by side

	Sell now	Rent it out	Leave it empty for a while
Vacant Home Tax	Declare for the year. A 100 per cent sale closing in the year qualifies for the transfer of ownership exemption	Not taxed if a tenant with a written agreement lives there at least 6 months of the year	Declare every year. The in care exemption can cover up to two consecutive years
Insurance	Keep coverage in place until closing	Tell the insurer before a tenant moves in	Tell the insurer the house is empty
Income tax	Report the sale. The principal residence designation is usually central	A change in use for the CRA, unless a 45(2) election is made	Ask an accountant how the years without anyone living there are treated
Ongoing work	Preparing, listing and closing	Landlord duties under the Residential Tenancies Act	Regular visits, upkeep and property tax
Later sale	Not applicable	Tenant rights travel with the house	Can be sold vacant

The Vacant Home Tax when a parent moves into care

The City of Toronto’s Vacant Home Tax is the rule most families miss. Here is how the City describes it.

Every owner declares, every year. Residential owners must declare the occupancy status of their property every year, even if they live there or qualify for an exemption. The declaration can be made by the owner or by an authorized representative acting on their behalf. You need the customer number plus the address or 21 digit assessment roll number from the property tax bill.

What counts as vacant. A residential property that was vacant for six months or more in the taxation year is subject to the tax. If no declaration is received by the deadline, the City deems the property vacant and sends a bill. The City’s page refers to an April 30 deadline. Check the page each year for the current declaration period.

The rate. Beginning with the 2024 taxation year, the rate is 3% of the property’s Current Value Assessment. As an illustration only, a house assessed at $1,200,000 would face a tax of $36,000 for a year it was taxed as vacant.

The exemption for a principal resident in care. The City lists this as an eligible exemption. The principal resident of the vacant property must be in a hospital, long term or supportive care facility for at least six months during the taxation year. The exemption may be claimed for up to two consecutive taxation years. The documents required are:

• a signed letter from the health care facility on letterhead
• proof of principal residence at the property before entering care

The City asks owners not to send personal medical documents or photographs.

Retirement residences. The exemption wording names hospitals and long term or supportive care facilities. If your parent has moved to a retirement residence, ask the City whether that residence qualifies before you rely on the exemption.

Penalties. The City says false declarations or failing to provide information when asked may lead to a fine of up to $10,000, in addition to the tax.

Two years is the limit. The in care exemption covers up to two consecutive taxation years. After that, an empty house needs another status. A tenant with a written agreement for a term of at least 30 days and a total of at least six months in the year counts as occupied. So does a family member or friend who lives there as their principal residence for at least six months of the year.

If you sell. When a property sells within the taxation year being declared, either the vendor or the purchaser can submit the declaration and the property qualifies for the transfer of legal ownership exemption, which requires a 100 per cent transfer. When a property sells after the year being declared, the vendor must submit the declaration, because only the vendor knows the prior year’s status. The City notes the tax is attached to the property, like property taxes. Keep a copy of every declaration for the buyer’s lawyer.

The Vacant Home Tax sits on top of regular property tax, which continues whatever you decide. Our post on Toronto property tax explains how that bill is set.

Insurance on an empty house

We could not find an Ontario regulator page that sets rules for insuring an empty home, so this section is short. The Insurance Bureau of Canada glossary separates two ideas. An unoccupied building has contents but no people, for example when the owners are away on vacation. A vacant building is one where all occupants have moved out with no intention to return. A house whose owner has moved permanently into care may fall into the second group.

The Bureau also says it is up to the policyholder to notify their insurance representative when things change. A parent moving out is a change. Call the insurer before the house sits empty, ask what the policy requires and get the answer in writing. Ask again before a tenant moves in or before listing.

Renting the house out

Renting can bring in income while the family decides. It also makes your parent a landlord under Ontario’s Residential Tenancies Act, 2006.

The basics of Ontario tenancy law

Ontario’s renting rights page sets out several points that apply to most rented houses:

• Landlords of most private residential rental units must use the standard lease template for all new leases.
• For most tenants, rent cannot go up by more than the annual rent increase guideline. Ontario lists the guideline for 2027 as 1.9%.
• A landlord can only evict in specific situations, using the proper written notice form from the Landlord and Tenant Board. The landlord must then apply for and receive an eviction order.

Does Toronto require a rental licence for a house?

For a single house rented to one household, we did not find a City licence on toronto.ca. The licences we found apply to other kinds of rentals:

• Multi-tenant houses. The City defines a multi-tenant house, often called a rooming house, as a premises where four or more rooms are rented out to separate people who do not live together as a single housekeeping unit. Operators of these houses must be licensed.
• RentSafeTO. This programme applies to apartment buildings with three or more storeys and 10 or more units. The City says units in a private home are not part of it.
• Short-term rentals. Stays under 28 consecutive days are short-term rentals. The City says its rules aim to let residents rent only their principal residence on a short-term basis.

Confirm with the City through 311 before renting, especially if you plan to rent rooms separately.

Selling later with a tenant in place

Selling is not by itself one of the reasons the Board lists for ending a tenancy. The Landlord and Tenant Board brochure How a Landlord Can End a Tenancy explains the one route tied to a sale:

1. The property must have no more than three residential units.
2. The landlord must have signed an agreement of purchase and sale.
3. One of these people must want to move in: the purchaser or their spouse, a child or parent of either of them or a caregiver for one of them.
4. The landlord gives Form N12 with at least 60 days notice, ending on the last day of a rental period or lease term.
5. If the tenant does not leave, the landlord applies to the Board on Form L2 and the person moving in files an affidavit.

The brochure says the landlord generally must pay the tenant one month’s rent or offer another unit the tenant accepts. Rules for notices given on or after September 21, 2026 add conditions, so have a lawyer or licensed paralegal confirm what applies to your notice. If no qualifying person will move in, this route is not available. A tenant in place can therefore affect who can buy the house and when.

Tax: the principal residence exemption and change in use

This is the part to take to an accountant before you choose. The points below come from the Canada Revenue Agency’s Guide T4036, Rental Income.

What qualifies as a principal residence. For any year, the CRA’s conditions include three points. You own the property alone or jointly. You, your current or former spouse or common law partner or any of your children lived in it at some time during the year. You designate it. For 1982 and later years, a family can designate only one home as its principal residence for each year.

Change in use when you rent. Every time you change the use of a property, the CRA considers you to have sold it at fair market value and immediately reacquired it for the same amount. If the house was the principal residence for the years before the change, there is no tax on the gain for those years.

The 45(2) election. When all of a principal residence becomes a rental, the owner can elect not to be considered as having changed its use. The guide says:

• You do not report a capital gain when the use changes.
• While the election is in effect, the house can be designated as the principal residence for up to four years, as long as no other property is designated for the same years.
• You cannot claim capital cost allowance, a deduction for wear on the building, while the election applies.
• Rental income, minus allowable expenses, must still be reported.
• The election is made with a signed letter that describes the property and states it is made under subsection 45(2) of the Income Tax Act, sent with the tax return.

Leaving it empty. The guide does not set out a rule for a house that simply sits empty after the owner moves into care. Ask your accountant how those years fit the designation rules for your family.

Selling. The sale must be reported with the principal residence designation. Our power of attorney guide covers the reporting step and the penalty for a late designation.

How Ontario sets long-term care fees

For a long-term care home, Ontario’s paying for long-term care page sets maximum co-payment fees that are the same in every home, whether for profit or not for profit.

Room type	Daily rate	Monthly rate
Long-stay basic	$70.00	$2,129.17
Long-stay semi-private	$84.40	$2,567.17
Long-stay private	$100.01	$3,041.97

These are the maximums effective July 1, 2026. Homes may charge extra for optional services such as hairdressing, cable TV, telephone or transportation.

The Rate Reduction Program. A resident in basic accommodation who cannot afford the co-payment may qualify for the Long-Term Care Rate Reduction Program. Ontario says the program is based on annual net income, starting from line 23600 of the most recent Notice of Assessment. It also states that the calculation will not include assets and gives a house the resident owns as the example. Semi-private and private rooms are not eligible for a rate reduction. Residents must re-apply each year.

Because the program looks at income, ask the care home how any new income, such as rent from the house, would be counted.

The rates above are for long-term care homes. Our post comparing condo and retirement residence costs in Toronto looks at that side of the budget.

Choosing between selling, renting and waiting

There is no rule that says which path is right. These questions help families talk it through:

• Is your parent’s move expected to be permanent?
• Who will visit the house, cut the grass, clear snow and check for leaks if it stays empty?
• Will the house still qualify for the Vacant Home Tax exemption next year and the year after?
• Has an accountant looked at the principal residence and change in use rules for your parent?
• Does your parent need the sale proceeds for care or a retirement residence?

If a sale makes sense, an estate style sale and a downsizing sale share much of the same work. Our guide to selling an estate home in Toronto covers clearing and preparing a house that has been lived in for decades.

What to do in the first month

1. Find the deed, the latest property tax bill and any power of attorney documents.
2. Ask the care facility for a signed letter on letterhead confirming the admission date.
3. Note the deadline for the next Vacant Home Tax declaration.
4. Call the home insurer and get written confirmation of what the policy requires.
5. Book time with an accountant about the principal residence designation and change in use.
6. Get a written home valuation so the family knows what the house is worth today.
7. Read our Toronto downsizing guide for the practical steps of clearing a family home.

When you are ready to talk through the options for your parent’s house, contact us and we will walk through them with you at your pace.