Toronto Real Estate Board Says Land Transfer Tax Should Be Scrapped, Not Capped
Posted by: Toronto Real Estate Admin / Category: Toronto Realtor
Toronto Real Estate Board Says Land Transfer Tax Should Be Scrapped, Not Capped
TORONTO, March 20, 2013 – In light of a
proposal to cap the Toronto Land Transfer Tax, being considered by the City of
Toronto’s Executive Committee today, the Toronto Real Estate Board (TREB) is
restating its strong belief that this tax should be phased-out.
“The Toronto Land Transfer Tax should be
scrapped, not capped. We are encouraged
that the Executive Committee is considering action on the Land Transfer Tax,
but, not only is capping not enough to correct the problems that this tax is
creating for our City, it could make this bad tax even worse,” said Ann Hannah,
President of the Toronto Real Estate Board.
In a letter to the Executive Committee, TREB
has pointed out that, based on reported details, the proposed capping scheme
could create considerable uncertainty for home buyers, if, as proposed,
surpluses in Land Transfer Tax revenue are dedicated for reducing the tax in
the subsequent year. Under this
scenario, home buyers could be artificially encouraged to delay home purchases,
thus interfering with the natural operation of the real estate market. This concern has also been articulated by
renowned municipal finance expert, Enid Slack of the University of Toronto, who
was recently quoted by the media as saying “If you want to reduce the land
transfer tax, why would you not just reduce the tax rate, and say the tax rates
are going down, so there is some certainty for taxpayers going forward? With
this method (capping), they’re not going to know what the tax rate is next
year.”
“The best approach is a phased elimination of
this tax. The only way to truly solve
the problems that this tax is creating for our City is to get rid of it; and
with a predictable phase-out strategy, home buyers could make informed
decisions and City Council could set a reasonable schedule, which would make
market distortions unlikely, ” said Von Palmer, TREB’s Chief Government and
Public Affairs Officer.
Research has proven that municipal land
transfer taxes have a negative impact on home sales. The C.D. Howe Institute
recently released an analysis of the Toronto Land Transfer Tax, which shows
that this tax has hurt Toronto’s economy by dampening home sales by 16 per
cent. This is supported by a recent poll
conducted by Ipsos Reid, which found that 77 per cent of GTA residents planning
to purchase a home in the next two years are more likely to purchase outside
Toronto specifically to avoid paying the Toronto Land Transfer Tax. This poll also found that nearly seven in ten
Torontonians, 68 per cent, support plans to eliminate the Toronto Land Transfer
Tax.
“Capping equals keeping. That’s not good
enough for our City and it’s not what Torontonians want. The public has
repeatedly made it clear that they want the Land Transfer Tax scrapped,” said
Palmer.
For information about Buyer Representation Agreements
(BRA) visit www.BRAFirst.ca
For Media/Public Inquiries: Mary Gallagher, Senior
Manager Media Relations.
Toronto
Real Estate Board 1400 Don Mills Road Toronto, ON M3B 3N1, Office: (416)
443-8158, Email:maryg@trebnet.com
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Article source: http://www.torontorealestateboard.com/market_news/release_market_updates/news2013/nr_LTT_no_capp_0313.htm
Tags: Toronto Realtor