The Toronto Real Estate Board (TREB) has released a statement following the City of Toronto’s Budget Committee decision not to currently move forward with proposed Land Transfer Tax (LTT) increases for first-time home buyers. In the statement, TREB expressed encouragement at the decision, however it remains concerned about a proposal to increase the LTT by $750 for all other buyers, and is also calling for changes that will assist first-time buyers.
“The City’s Budget Committee has done the right thing by taking proposals to hike the Land Transfer Tax on first-time buyers off the table,” said Larry Cerqua, TREB president, in the statement. “TREB has been voicing its concern on these proposals since they were first announced late last year, and we are glad to see that City Hall is listening. We believe that Mayor Tory understands the importance of keeping Toronto affordable for everyone, especially first-time buyers, and we applaud his leadership in this regard.”
The City’s Budget Committee was initially considering the recommendation to increase the Land Transfer Tax by $475 for all first-time home buyers, and by as much as $4,475 for some first-time buyers. Staff also recommended increasing the LTT by $750 for repeat home buyers.
The Budget Committee decided not to move forward with any increases for first-time buyers by increasing the rebate from $3,725 to $4,475 to offset the $750 which other buyers will face. TREB has been voicing its concerns about the proposed increases and recently launched a campaign to bring about public awareness of the proposal, encouraging home buyers let Councillors know their opinions on the subject.
“We are glad that the Budget Committee has addressed some of the concerns that home buyers have with these proposals, but City Council needs to go further. A proposal to hike the Land Transfer Tax by $750, or seven per cent, for all repeat buyers is still on the table,” said Von Palmer, TREB chief communications and government affairs officer, in the statement. “City Hall’s take from this tax has increased by 200 per cent since 2008, from $3,725 to over $11,000 on an average priced property. Hasn’t City Hall already taken enough from home buyers?”
Although TREB is encouraged that the Budget Committee is not following through with the proposed increase for first-time buyers, TREB said in the statement that it believes City Council should go further by providing new relief for first-time home buyers. Currently, they are allowed a rebate of the LTT that is payable on a maximum purchase price of $400,000, which was the average price when this tax was implemented in 2008. The average price in 2016 was over $700,000, meaning first-time home buyers have lost significant ground on the rebate. The provincial government recently acknowledged this concern by doubling the provincial LTT rebate. TREB wants City Council to make similar adjustments to the City’s Land Transfer Tax rebate to account for climbing home prices.
“When the Land Transfer Tax was implemented, City Council put in place a rebate that essentially meant first-time buyers purchasing an average-priced home paid zero City Land Transfer Tax,” added Palmer. “Today, that purchaser would pay over $6,000 in Land Transfer Tax. City Council should follow the provincial government’s lead and give first-time buyers the relief that they deserve.”