#Toronto Real Estate Board Suggest Scrapping Land Transfer Tax

Toronto Real Estate Board Suggest Scrapping Land Transfer Tax

 

 

TORONTO, March 20, 2013 -- In light of a proposal to cap the Toronto Land Transfer Tax, being considered by the City of Toronto’s Executive Committee today, the Toronto Real Estate Board (TREB) is restating its strong belief that this tax should be phased-out.

“The Toronto Land Transfer Tax should be scrapped, not capped. We are encouraged that the Executive Committee is considering action on the Land Transfer Tax, but, not only is capping not enough to correct the problems that this tax is creating for our City, it could make this bad tax even worse,” said Ann Hannah, President of the Toronto Real Estate Board.

In a letter to the Executive Committee, TREB has pointed out that, based on reported details, the proposed capping scheme could create considerable uncertainty for home buyers, if, as proposed, surpluses in Land Transfer Tax revenue are dedicated for reducing the tax in the subsequent year. Under this scenario, home buyers could be artificially encouraged to delay home purchases, thus interfering with the natural operation of the real estate market. This concern has also been articulated by renowned municipal finance expert, Enid Slack of the University of Toronto, who was recently quoted by the media as saying “If you want to reduce the land transfer tax, why would you not just reduce the tax rate, and say the tax rates are going down, so there is some certainty for taxpayers going forward? With this method (capping), they’re not going to know what the tax rate is next year.”

 

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