On the heels of Toronto City Council's recent decision not to cut the Toronto Home Buying Tax (Land Transfer Tax) in its 2014 Budget, Toronto's REALTORS® are looking forward to joining Torontonians in speaking out about this issue during the upcoming municipal election. REALTORS® are also calling on municipal election candidates to support home buyers and owners by committing to provide relief from the Land Transfer Tax. "Torontonians have made it clear that they want the Land Transfer Tax cut, but, unfortunately, City Council chose not to.
This was a central issue for Torontonians in the last municipal election and they gave City Council a strong mandate to cut this tax. Torontonians continue to feel strongly about this unfair and hurtful tax and thousands of them made their voices heard to City Council, in recent months, during the City's budget debates. REALTORS® look forward to continuing to raise this issue, along with the public, during the municipal election campaign. We believe that Torontonians will, once again, expect City Council to take action on this issue," said Dianne Usher, President, Toronto Real Estate Board.
A recent poll, conducted by Ipsos Reid, found that 69% of Torontonians support a phase-out of the Toronto Land Transfer Tax.
"It's no surprise that a strong majority of Torontonians want the Home Buying Tax cut. They believe that this is the wrong way for City Council to fund City services because this tax hurts people when they can least afford it. It penalizes people like growing families, down-sizing retirees, and even first-time home buyers saving for a down payment," said Usher.
In addition to hurting people when they are most vulnerable, REALTORS® have pointed out numerous other concerns with the Toronto Land Transfer Tax.
In particular, REALTORS®, and the public, have told City Council that this tax:
has become more and more regressive as time has gone by because its rebate for first-time home buyers and its tax rates have not been adjusted with inflation, resulting in about 40% of first-time home buyers paying some LTT to City Hall and the highest land transfer tax rate being levied on home buyers purchasing below average-priced homes;
makes Toronto less affordable by significantly increasing upfront costs for home buyers ($12,000 for the purchaser of an average detached home, in addition to a similar amount for the provincial land transfer tax);
impacts the economy by dampening home sales by 16% annually.
According to a study by the C.D. Howe Institute, thereby risking jobs that depend on spin-off spending (averages approximately $53,000 for every re-sale housing transaction, according to a study conducted by the Altus Group) generated when people move;
makes Toronto less competitive, as the only municipality in Ontario with two land transfer taxes;
poses risks for funding City services because the revenue that it generates fluctuates with the City's real estate market, and is unpredictable; and,
is unfair because it forces people who have to move, like downsizing seniors or growing families, to pay thousands of dollars more than their fair share, for the same level of municipal services as those who don't move.
"Home ownership is a worthy goal, which benefits our City in many ways. City Council should not be making home ownership more difficult to achieve, and it should be focused on eliminating risks to Toronto's economy and competitiveness, funding services in a predictable way, and fair taxation policies," said Von Palmer, Chief Government and Public Affairs Officer. "TREB has consistently, and loudly, spoken out on this issue and we will continue to do so during the municipal election campaign because it is the right thing to do."