Paul Etherington – Toronto Sun
President of the Toronto Real Estate Board

With the municipal election campaign in full swing, a recent poll shows that a majority of Torontonians support a reduction of the Toronto Home Buying Tax (Toronto Land Transfer Tax), and would be more likely to vote for a Mayoral or Councillor candidate who supports reducing or eliminating this tax. Since 2008, the average Toronto Land Transfer Tax has increased 78%, more than double the increase in the average house price and outpacing inflation.

The Toronto Home Buying Tax costs the purchaser of an average Toronto home about $8,000, up front, on top of a similar amount for the provincial Land Transfer Tax.  This is a huge cost that hits people when they can least afford it. It targets people like growing families and retirees when they need to move to accommodate their changing lifestyle.  It’s no wonder that Toronto voters want municipal election candidates to commit to relief from this tax for home buyers.

The poll was conducted by Ipsos Reid, between May 15 and May 29, and found that:

* 58% of Torontonians support a reduction in the Toronto Land Transfer Tax, while 28% oppose.

* A majority (51%) of Torontonians are more likely to vote for Mayoral or Councillor candidates who support reducing or eliminating the Toronto Land Transfer Tax, while only 10% would be less likely.

* 52% of Torontonians support increasing the maximum rebate of the Toronto Land Transfer Tax allowed for first-time home buyers, while 32% oppose.

* 67% of Torontonians planning to purchase a home in the next two years are more likely to consider purchasing outside of Toronto to avoid paying the Toronto Land Transfer Tax.

* 56% of recent first-time home buyers, in Toronto, had to pay some Toronto Land Transfer Tax because City Hall’s first-time buyer rebate is insufficient because it has not kept pace with inflation.

Clearly, the Toronto Home Buying Tax is an important issue for voters in the upcoming municipal election. Torontonians understand that the Home Buying Tax is bad for our City’s economy and unfairly targets home buyers to pay more than their fair share of taxes.

Independent research has demonstrated that the Toronto Land Transfer Tax is having a negative impact on the City’s economy. A 2012 study conducted by the C.D. Howe Institute found that the Toronto Land Transfer Tax has dampened Toronto home sales by 16% annually.

Comment: Isn’t that scary? Imagine another 1,000-1,500 sales a month on top of the current levels!

A new study, released in April 2014, conducted by Altus Group Economic Consulting, found a significant loss of economic activity in the City of Toronto, and a corresponding loss of thousands of jobs, due to the Toronto Land Transfer Tax.  The study found that, between 2008 and 2013, the Toronto Land Transfer Tax is responsible for:

* a loss of $2.3 billion in economic activity
* a reduction of $1.2 billion in GDP
* a loss of 14,934 full time jobs
* a loss of $772 million in wages and salaries
* a loss of 38,278 resale home transactions

Comment: Come on, isn’t that a little over dramatic?

Furthermore, the Ipsos Reid poll found that if recent Toronto home buyers had not had to pay the Toronto Land Transfer Tax, 19% of them would have spent that money on home renovations, 21% would have spent it on furnishings and appliances, and 45% would have used it to reduce their mortgage, thereby adding flexibility to their household budget for other spending.

The Toronto Real Estate Board will continue to highlight the impact of the Toronto Home Buying Tax during the municipal election campaign, and raising this issue, along with the public, with municipal election candidates. We believe that Torontonians will, once again, expect City Council to take action on this issue.

—————————————————————————————————–
Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
—————————————————————————————————–