Toronto Loft Conversions

Toronto Loft Conversions

I know classic brick and beam lofts! From warehouses to factories to churches, Laurin will help you find your perfect new loft.

Modern Toronto Lofts

Modern Toronto Lofts

Not just converted lofts, I can help you find the latest cool and modern space. There are tons of new urban spaces across the city.

Unique Toronto Homes

Unique Toronto Homes

More than just lofts, I can also help you find that perfect house. From the latest architectural marvel to a piece of our Victorian past, the best and most creative spaces abound.

Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.

 

Toronto Land Transfer Tax

What is the Potential Impact of the New Tax on Real Estate in the City of Toronto and Suburbs?

2007 was a very strong year for Toronto real estate. The number of downtown condo sales was up about 25% from last year, and the same is true of detached homes in areas such as Scarborough. Prices overall are forecast to increase by about 5-7% in 2008, with the relatively cheaper condo market potentially appreciating even more.

Bidding wars continue to be the norm in some hot Toronto neighbourhoods – and demand for the most part exceeds supply. Employment continues to be at a record high, and interest rates, while higher than a few years ago, remain at historic lows with increasing signals that reductions are in store for 2008.

For the first half of the year we are likely to see the following:

* the Toronto real estate market continues at a respectable clip, as continued low interest rates and near full time employment support consumer confidence
* a reduction in down payment and equity as both first time and repeat home buyers make purchases with less money (paying the new Toronto land transfer tax with money that they previously could have used for a down payment)
* higher demand for turn-key homes as opposed to fixer-uppers, as buyers realize that any renovation money they might have had must now be applied to the new Toronto land transfer tax
* investors and repeat buyers waiting longer before making that second home purchase or investment purchase (to save up enough) – and perhaps more selectivity from investors, since rate of return will not be as favourable once the tax is incorporated
* incentives from major lending institutions to help home buyers – such as banks offering to help pay the new land transfer tax up, or more cash-back mortgages
* more activity in the 905 region near the border with Toronto, as buyers avoid the new Toronto land transfer tax by buying outside the city

In the second half of 2008, it is hard to say, but we may see:

* more development in the 905 region on the city border as developers capitalize on demand by buyers just on the outskirts of Toronto (such as Thornhill, Markham, Mississauga and Pickering)
* smaller and more affordable housing development within the city core to keep the purchase price at a level that attracts first time buyers
* more redevelopment in parts of west and east Toronto that have up to now been neglected by developers, as their relative affordability encourages development

The Bottom Line on the New Toronto Land Transfer Tax

In 2007, the Toronto real estate market was very solid and in some cases was beginning to exhibit some signs of speculative frenzy. We continue to see more demand than supply for decent real estate in the City of Toronto.

The new Toronto land transfer tax can, in some ways, be a good thing. It might cause speculators to be more prudent when making an investment decision. It may also make first time home buyers more cautious about buying beyond their means or jumping in without sufficient equity. While the implementation of this new tax is abhorrent to some, is it possible that it may in fact sustain our real estate boom, by preventing a bubble from forming and/or getting out of control?

In an open letter to Mayor David Miller, the Toronto Real Estate Board raised concerns about a possible home-buying tax in Toronto. They say a Toronto land transfer tax, on top of the existing provincial land transfer tax, would cause homebuyers to pay the same tax twice and encourage homebuying outside city limits.

“A land transfer tax is a home-buying tax. It is a tax charged directly to homebuyers when they purchase a property, which is usually intended to offset costs for providing services directly related to real estate transactions. If the City intends to charge a land transfer tax just to raise additional revenue for general municipal services, is it fair to expect homebuyers to pay for services that the whole community benefits from?,” said Dorothy Mason, President of the Toronto Real Estate Board.

“If the City adopts a land transfer tax, Toronto homebuyers will be faced with a double whammy of land transfer taxes – a municipal land transfer tax and a provincial land transfer tax,” added Mason.

The provincial government already charges a land transfer tax on property transactions. For the average Toronto home, according to the Toronto Real Estate Board’s statistics, the provincial land transfer tax payable is approximately $4,200.

“If the City moves ahead with a second land transfer tax, average Toronto homebuyers could be faced with paying almost $1,900 on top of the $4,200 that they already have to pay for the existing provincial land transfer tax, money that could be spent on other expenses when purchasing a home such as appliances.”

“Mayor Miller and all of City Council should realize that forcing homebuyers to pay a second land transfer tax will have implications for the City. It will make Toronto housing less affordable, and encourage homebuyers to choose to live outside of the City, where they only have to pay the land transfer tax once. This could mean more commuting, more traffic, and environmental impacts, like smog, for the GTA”, said Mason.

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