Toronto Real Estate Agents Raise Concerns Over Toronto “Home-buying Tax”
In an open letter to Toronto Mayor David Miller, the Toronto Real Estate Board has raised concerns about a possible home-buying tax in Toronto.
The Toronto Real Estate Board’s letter provided Mayor David Miller with Realtors’ initial input to a City discussion paper on potential new revenue sources. Of particular concern to the Toronto Real Estate Board is the possibility of a Toronto land transfer tax, which would be levied on top of the existing provincial land transfer tax, meaning that Toronto homebuyers would be faced with paying this type of tax twice for the same transaction.
“Let’s call a spade a spade. 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.
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 of 0.5%, as is being considered, 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. That’s an additional 45% in land transfer tax. Even a 0.1% Toronto land transfer tax would represent almost a 10% increase in land transfer taxes. Also, with total closing costs (e.g. legal fees, land transfer tax) usually around 1.5% of a property’s selling price, a 0.5% Toronto land transfer tax would represent a 33% increase in closing costs”, said Mason.
“Mayor Miller and all of City Council should realize that forcing Toronto homebuyers to pay a second land transfer tax will have implications for the City. It will make Toronto real estate 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.
Toronto real estate agents are passionate about their work. They adhere to a strict code of ethics and share a state-of-the-art Multiple Listing Service designed exclusively for Realtors. Serving more than 25,000 Realtors throughout the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board.