The Toronto Real Estate Board (TREB) wants Toronto City Council to act early to stop a potential significant Land Transfer Tax (LTT) increase, which is currently in the proposal stage and working its way through the City’s approval and budget process.
Recently, Toronto City Council formally asked the City’s budget committee to consider increasing the amount that home buyers pay City Council for an average-priced property by another $750, on top of the current $11,000 in LTT that they already pay City Hall as an upfront closing cost. This is in addition to another upfront fee of $12,000 in LTT homeowners must pay to the Province. The proposed changes would also at worse see first-time home buyers paying up to $475 more, or, at best, being no better off than they are now, although Ontario recently doubled its rebate in recognition of the needs of first-time buyers.
“Toronto’s housing prices are top of mind for many Torontonians,” said Larry Cerqua, TREB president, in a press release. “Simply put, housing affordability is water-cooler talk in Toronto. The last thing people want to hear is that City Hall wants them to dish out another $750, on top of the $11,000 they already pay. City Hall should be looking for ways to make housing affordability in Toronto better, not worse; especially for first-time buyers who, under these proposals, will be going backwards, or at best be no better off.”
The proposed changes would include increasing the LTT rates by adding an additional LTT rate on the portion of a property valued from $250,000 to $400,000; changing the maximum allowed rebate for first-time home buyers to either $4,000, which is higher than it is currently but would not offset the tax increase for those buyers, or a maximum rebate of $4,475, which would leave first-time buyers as no better off than they are today; eliminating the first-time buyer rebate entirely for first-time home buyers purchasing a home above a certain price to be determined by Council; and increasing the LTT rate on the value of a home over $2 million from two per cent to 2.5 per cent.
“Time and time again, we have heard City Hall talk about the importance of housing affordability, and yet here is another proposal that will make this great city less affordable,” added Von Palmer, chief communications and government affairs officer at TREB. “It simply doesn’t make sense. City Council should stop this proposal in its tracks and refuse to refer it for consideration during the upcoming budget process.”