If you purchased a home in Toronto in the past six years you were hit not once, but twice when it came to land transfer taxes.
Toronto’s realtors want the city’s next mayor to do something about that, and they’re applying the pressure in the final stretch of the mayoral race.
Now the rest of the country sometimes struggles to find much sympathy for the plight of Torontonians, but it is the only city where homeowners are hit twice when purchasing a home.
There’s the provincial land transfer tax, and then the Toronto tax (introduced in 2008) on top of it.
The Toronto land transfer tax put roughly $350 million into city coffers last year, but the Toronto Real Estate Board argues the costs are much higher.
Citing research done by Altus Group on behalf of the Ontario Real Estate Association, Toronto’s realtors say that between 2008 and 2013 the municipal land transfer tax is responsible for:
- A loss of $2.3 billion in economic activity
- A $1.2-billion reduction in GDP
- Almost 15,000 full-time jobs lost
- $772 million in lost wages and salaries
- And a little more than 38,000 resale home transactions that never happened because of the tax.
The city’s real estate board says the tax costs a homebuyer some $8,000 on the average Toronto home, with the province taking a similar amount. It also applies to commercial properties.
Board president Paul Etherington call is an “important issue for many Torontonians, and we expect it will influence their voting decisions.”
So where do the three leading candidates stand?
Doug Ford is picking up where his brother, Mayor Rob Ford, left off. Rob Ford vowed to scrap Toronto’s land transfer tax, but it didn’t make any real progress on the issue during his time in office. City Council wasn’t onside on this one.
Doug Ford says he’ll bring in an immediate 15% reduction to the tax, with the intention of phasing it out.
Olivia Chow wants to raise the tax on transactions involving the city’s most expensive properties – think $2 million and above.
Perceived frontrunner John Tory hasn’t drawn a line in the sand on the land transfer tax, but is vowing to keep property taxes at our below inflation.
Ford’s opponents are questioning how the city will make up that 15% in the budget. It comes out to about $52 million less for the city’s coffers, and that would just be the first round.
What does the Toronto Real Estate Board think of the candidates’ positions?
It supports Ford’s stance, hopes Tory will “articulate” a plan for relief of the Toronto land transfer tax, and does not support Chow’s proposal (to say the least.
Apparently Ms. Chow was booed, loudly, when the three argued the issue in front of realtors this week).
For the record, I don’t live in Toronto anymore and have never paid the tax (it didn’t exist when I bought my Toronto condo in 2002). While I don’t have skin in this particular game, I’ll be fascinated to see if Torontonians make it a ballot box issue.