One of the most contentious real estate issues in 2007 has been the City of Toronto's adoption of a "municipal" land transfer tax. Passed into law under the "City of Toronto Act" every home sold in the Greater Toronto Area (GTA) will now see a municipal land transfer tax applied to each sale in addition to the provincial land transfer taxes already in place. This newly created municipal tax was created primarily as a means to bridge the City of Toronto's budget deficit and is expected to add $300 million annually to the city's offers.
What impact does this new tax mean? Example: On a $300,000 home, the current Ontario land tax payable is $2,975. Under the City of Toronto Act, there is now an additional municipal land transfer tax of approximately $2,000 payable to the City as well.
The fear this new municipal tax brings to bear on the tax paying public is two-fold. First, for those living in the GTA, it brings an already high cost of living and home ownership to an even higher level. More importantly, for the rest of us living in Ontario it brings about the real possibility of having cash-strapped municipalities elsewhere passing their own land transfer taxes at the local level. Whether passed to offset a budget deficit or is done under the guise of financing mass transit expansion or infrastructure improvements etc., it is more money being extracted from taxpayers which more often than not stems from the financial need resulting from bad management.
Both the Canadian and Ontario Real Estate Associations lobbied hard to defeat Toronto’s proposed new tax, yet unsuccessfully so. Efforts by other municipalities to adopt a municipal land transfer tax will meet with similar opposition in additional to strong resistance at the local level. In the same vein however, the Ontario Real Estate Association has continued to fight for land transfer tax reform and has as of this week obtained a significant victory. A provincial initiative wherein first-time Buyers of “new” homes obtained a refund of the land transfer taxes paid has now been expanded to include the purchase of a “resale” home by first-time buyers as well. This new incentive takes effect immediately. Incentives of this type can only serve to strengthen the sale of homes both new and in the resale market.
Lobbying by REALTOR® Associations at all levels of government is yet one more way REALTORS® help Canadians obtain their dream of home ownership while at the same time generating significant benefits to the economy as a whole.
What impact does this new tax mean? Example: On a $300,000 home, the current Ontario land tax payable is $2,975. Under the City of Toronto Act, there is now an additional municipal land transfer tax of approximately $2,000 payable to the City as well.
The fear this new municipal tax brings to bear on the tax paying public is two-fold. First, for those living in the GTA, it brings an already high cost of living and home ownership to an even higher level. More importantly, for the rest of us living in Ontario it brings about the real possibility of having cash-strapped municipalities elsewhere passing their own land transfer taxes at the local level. Whether passed to offset a budget deficit or is done under the guise of financing mass transit expansion or infrastructure improvements etc., it is more money being extracted from taxpayers which more often than not stems from the financial need resulting from bad management.
Both the Canadian and Ontario Real Estate Associations lobbied hard to defeat Toronto’s proposed new tax, yet unsuccessfully so. Efforts by other municipalities to adopt a municipal land transfer tax will meet with similar opposition in additional to strong resistance at the local level. In the same vein however, the Ontario Real Estate Association has continued to fight for land transfer tax reform and has as of this week obtained a significant victory. A provincial initiative wherein first-time Buyers of “new” homes obtained a refund of the land transfer taxes paid has now been expanded to include the purchase of a “resale” home by first-time buyers as well. This new incentive takes effect immediately. Incentives of this type can only serve to strengthen the sale of homes both new and in the resale market.
Lobbying by REALTOR® Associations at all levels of government is yet one more way REALTORS® help Canadians obtain their dream of home ownership while at the same time generating significant benefits to the economy as a whole.
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