Finding an affordable home in Toronto is becoming a CN Tower-sized challenge for many young families and it could get worse if Toronto City Council increases the Toronto Land Transfer Tax (LTT). Representatives from the Ontario Real Estate Association (OREA) presented at today’s Toronto Budget Committee meeting, where they urged City Council to reject a proposal by city staff to increase the Toronto LTT.
“Toronto City Council has an opportunity to take action to support more affordable home ownership in our city,” said Tim Hudak, OREA CEO. “Today, home prices are at record highs and new listings are at record lows. It’s become so much harder for first-time home buyers and young families to break into the market. A proposed tax increase could not come at a worse time.”
On the average priced Toronto home, a first-time home buyer pays over $15,000 in taxes to the city and the province. As part of the 2017 budget, city staff are proposing to hike the local LTT. The staff proposal would impose over $85 million in new taxes on home buyers with first-time home buyers paying almost $500 more in LTT on an average priced home.
“Ultimately, Toronto needs to roll back the LTT or, at the very least, not make this punishing tax even worse,” said Hudak. “Voting down the proposal to increase the LTT is a good first step but I encourage Council to go even further. To start, Toronto should follow Ontario’s lead and double the city land transfer tax rebate for first-time home buyers.”
As of January 1, 2017, Premier Wynne doubled the provincial land transfer tax rebate program meaning that first-time home buyers receive up to $4,000 in land transfer tax relief. If the City matched the provincial relief, first-time buyers in Toronto would see up to $12,000 in tax savings. Unfortunately, Toronto is proposing to swipe up to 25 per cent of the provincial savings out of the pockets of young couples and put it into city coffers instead.
“Toronto is a great place to live, work and raise a family; for generations, it’s where thousands of young people got their start in life,” said OREA president Ray Ferris. “Research has demonstrated the LTT has discouraged economic activity and reduced listings since all home sellers know they have to pay the tax on their next purchase. Reducing the LTT will help alleviate the housing supply shortage by bringing much needed housing stock on the market.”
Ontario Realtors suggest that Toronto work with the province to encourage the building of a greater range of housing types, namely townhomes, duplexes and stacked townhomes. Building more of these units would give a growing family more affordable options for staying in Toronto and baby-boomers more options for ‘right sizing’ out of their large detached homes.
About the Ontario Real Estate Association
The Ontario Real Estate Association represents 67,800 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com