City Hall Should Do the Right Thing: Phase-Out Land Transfer Tax
Posted by: Toronto Real Estate Admin / Category: Toronto RealtorTREB President’s Column as it appears every Friday in the Toronto Sun’s Resale Homes and Condos section.
November 15, 2013 –
Owning a home is a good thing, not just for your financial well-being and quality of life, but also for the success of our City as a whole. It benefits our City through pride of ownership, a vibrant population, and the economic activity associated with home purchases. So, why, then, does Toronto City Hall make it tougher for you to own a home, in our great City, with its back-breaking Land Transfer Tax? Shouldn’t they be making it easier, instead of more difficult?
Toronto is the only municipality in Ontario where home buyers are forced to pay a municipal land transfer tax in addition to the provincial land transfer tax. That means that someone buying an average detached Toronto home has to pay over $25,820 in combined land transfer taxes. That’s the highest in North America. And the news gets worse: this tax has to be paid in full, up front, as a closing cost, and it can’t be tacked on to a mortgage.
What is most upsetting about the Land Transfer Tax is that it hurts people when they can least afford it. It affects people like growing families, who need to move to meet their changing needs and priorities; retirees who are making necessary changes to their living arrangements and have to sacrifice their savings; and even many first-time buyers, struggling to save for the dream of home ownership, have to pay. That’s not right.
It’s also not right that City Hall has been collecting more than budgeted from the Land Transfer Tax, every year since it has been in place. In fact, since this tax took effect, City Hall has collected over $300 million more than budgeted for it! Simply put, that means one thing: over-taxation. That surplus belongs to Toronto home buyers, including the growing families, retirees, and first-time buyers who are just trying to meet their needs. A recent poll found that, if home buyers had that money back, 56% of them would have put it towards their down payment so that they are not saddled with as much mortgage.
The amount that City Hall collects in Land Transfer Tax from each average re-sale home purchase has increased a shocking 78 percent since the tax took effect in 2008, more than twice the rate of home price increases! That means that City Hall has been milking the Land Transfer Tax at a rate that greatly outpaces inflation.
For all of these reasons, REALTORS® have consistently and loudly called for City Hall to phase-out the Toronto Land Transfer Tax. We will continue to do so, and encourage you to join us. It is expected that City Council will debate an initial cut to this unfair tax soon, but they need to hear from you to make that happen. Your voice counts! Tell City Council to do the right thing and phase out the Toronto Land Transfer Tax. You can do so quickly and easily at www.LetsGetThisRightToronto.ca.
Dianne Usher is President of the Toronto Real Estate Board, a professional association that represents 37,000 REALTORS® in the Greater Toronto Area.
Dianne Usher is President of the Toronto Real Estate Board,
a professional association that represents 37,000 REALTORS®
in the Greater Toronto Area.
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Article source: http://www.torontorealestateboard.com/market_news/president_columns/pres_sun_col/index.htm
Tags: Toronto Realtor