On Feb. 2, members of the Toronto Real Estate Board (TREB) met with the City of Toronto’s Budget Committee to discuss affordable housing in the Greater Toronto Area and make recommendations on the region’s Land Transfer Tax (LTT), implemented in 2008. In order to better meet the needs of prospective homebuyers requiring affordable housing options, TREB suggested that the City’s Budget Committee increase the maximum rebate for first-time homebuyers and adjust the LTT to reflect ongoing inflation.
“As a result of rising house prices since the Land Transfer Tax was implemented, the average LTT paid to the City has increased by a whopping 102%, but the maximum allowed rebate for first-time buyers has been left unchanged, significantly reducing the actual benefit to first-time buyers,” says Von Palmer, Chief Government and Public Affairs Officer at TREB. “Under the current structure, even a first-time buyer purchasing a below average priced home would NOT be exempt from land transfer tax and be forced to pay thousands of dollars to the City.”
In support of their recommendations, TREB drew attention to the various ways in which the City would benefit from the suggested changes, including reduced pressure on social housing wait lists, as more individuals would be able to afford the transition to homeownership. According to TREB, a survey from 2012, released by the City of Toronto’s Affordable Housing Office, found that 14 per cent of individuals who became homeowners, with help from the City, were previously living in social housing or on a wait list.
“We believe that the two adjustments to the Land Transfer Tax that we are recommending could significantly help more people to become home owners and help the City to achieve its affordable housing goals,” says Palmer.
Toronto Mayor John Tory previously announced that affordable housing challenges would be a top priority for his mayoral team in 2015.