My recent email to the Mayor and Toronto City Council

As a real estate agent, it is my job to give infor­ma­tion to the pub­lic. As soon as they hear about the City’s pro­posal to charge a sec­ond land trans­fer tax they ask me what it will cost them and what they can do to stop this bad idea. I tell them to email the Mayor and the entire Coun­cil, just as I am doing, to TELL THEM WHAT AN INCREDIBLY BAD IDEA IT IS!

Nobody likes taxes, but the pub­lic and Toronto Real­tors have both been very clear and adamant that a sec­ond land trans­fer tax is not the right approach to address­ing the City’s fis­cal chal­lenges. The main rea­son is because it could make the dream of home own­er­ship more dif­fi­cult to achieve for home buy­ers (espe­cially first time buy­ers), while impact­ing prop­erty val­ues for some cur­rent home owners.

Even though this tax will be paid by home buy­ers, cur­rent home own­ers under­stand that it could make their prop­er­ties less mar­ketable com­pared to homes in other munic­i­pal­i­ties where there is only one land trans­fer tax. This could hurt their property’s value, which would impact seniors the most because many of them rely on their property’s value to help with their retire­ment. New arrivals to the city will have more trou­ble afford­ing a home due to this tax. Young fam­i­lies will have to pay more and pos­si­bly not be able to afford a home. Are you okay with this, will you be able to sleep at night know­ing you did this?

Gen­er­ally, the pub­lic believes that this tax is unfair, that the City hasn’t jus­ti­fied it, and that the City should first focus on get­ting its own house in order. It appears to every­one that there is some sort of black hole into which this new money is going to go. What new ser­vices are we going to get for the money? Oh yes, right… none… The prospect of these new taxes was not even dis­cussed dur­ing the last elec­tion – make it an issue next elec­tion and let the peo­ple decide.

Toronto res­i­dents are fac­ing the largest tax increases ever pro­posed. This year, home­own­ers faced a prop­erty tax increase of 3.8%, a new garbage tax of 2.8% as well as a motor vehi­cle tax rep­re­sent­ing a 3% increase. These results are stag­ger­ing. Toronto res­i­dents are fac­ing a tax increase approach­ing 10%. Where is the justification?

You have the chance to stop now, to do the right thing. If you go for­ward, know that you do so against the wishes of the peo­ple and that they will return the favour the next election.

Lau­rin Jef­frey
Real Estate Sales­per­son
Right At Home Realty Inc., Brokerage

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Thanks again for your efforts in send­ing emails to the mayor and coun­cilors oppos­ing the Toronto land trans­fer tax. Please spread the word about the Toronto Real Estate Board’s new web­site www​.nohome​buy​ing​tax​.com to assist the pub­lic cal­cu­late what the tax will cost them and to make it easy for the pub­lic to email the mayor and councilors.

For those of you who have received a reply from politi­cians, please note the “real­ity check” below which we have shared with Toronto coun­cilors and media con­tacts to counter some of the mis-information that some coun­cil­lors are email­ing some of you regard­ing first time home buyer exemp­tions and prop­erty tax rates.

Toronto Land Trans­fer Tax: REALITY CHECK

Toronto’s land trans­fer tax is unfair even with a rebate for first-time buy­ers of new homes:

FACT: The pro­posed rebate for first-time buy­ers would ONLY APPLY TO NEW HOMES – NOT RESALE HOMES.
* This clearly dis­crim­i­nates against buy­ers who pre­fer re-sale prop­er­ties, which is the vast major­ity. Approx­i­mately, two-thirds of annual home sales in Toronto are re-sale prop­er­ties.
* The vast major­ity of new homes being built in Toronto are high-rise con­do­mini­ums, mean­ing that this rebate dis­crim­i­nates against buy­ers whose lifestyle can­not be accom­mo­dated by a con­do­minium.

FACT: The pro­posed rebate for first-time buy­ers ONLY APPLIES TO A MAXIMUM OF $2,000.
* $2,000 equates to the land trans­fer tax on a prop­erty val­ued at approx­i­mately $227,000. Pur­chasers of prop­er­ties above this value WILL pay the bal­ance of the Toronto land trans­fer tax.
* With Toronto’s AVERAGE price at approx­i­mately $380,000, there are almost no prop­er­ties avail­able for under $227,000. This means that ALL first-time buy­ers of even very mod­est prop­er­ties will pay a sec­ond land trans­fer tax.

Toronto’s prop­erty tax rates DO NOT off­set the neg­a­tive impact of the 100% increase in land trans­fer tax:

FACT: Tax com­par­isons can only be made on the same types of prop­erty.
* Prop­erty taxes are deter­mined by mul­ti­ply­ing the municipality’s tax rate by the property’s assessed value.
* Although Toronto’s res­i­den­tial tax rates are lower than other GTA munic­i­pal­i­ties, assessed val­ues for com­pa­ra­ble prop­er­ties are sig­nif­i­cantly higher in Toronto, mean­ing that Toronto’s taxes for the SAME type of prop­erty are higher.
* For exam­ple, an aver­age 2000 sq. ft. home in Toronto would be MUCH more expen­sive than an aver­age 2000 sq. ft. home in Mis­sis­sauga, mean­ing that Toronto’s lower prop­erty tax rate would be off­set by the higher assessed value.

FACT: Land trans­fer taxes are a large UP-FRONT COST faced by the home buyer.
* Prop­erty taxes can be paid monthly and, there­fore, are more eas­ily absorbed into home buyer’s budgets.

Von Palmer
Direc­tor of Gov­ern­ment Rela­tions & Chief Pri­vacy Offi­cer
Toronto Real Estate Board

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Con­tact the Jef­frey Team for more infor­ma­tion

Related posts:

1. Real­tors ask Toronto coun­cil to think it through
2. Toronto Land Trans­fer Tax
3. Con­cerned Res­i­dents Tell Mayor and City Coun­cil to Shelve Toronto Home-Buying Tax
4. Sco­tia­bank report says Toronto tax will send buy­ers to 905 area
5. Actions Speak Louder than Words on Afford­able Housing