Toronto City Local authority or council is voting today on no matter what to raise the municipal land transfer tax— which the Toronto Regional Real Estate Board (TRREB) is imploring it not to increase lest housing become even less affordable.
“While it may be tempting to raise land transfer taxes on buyers of homes priced over $2 million, City Council should remember two things: first, an average priced home in Toronto last year was almost $1,000,000, and this typically represents a modest home by Toronto standards. The average price of a detached home in Toronto was almost $1.5 million in 2020,” Lisa Patel, TRREB’s president, said in a statement.
“Secondly, any increase to the already high land transfer taxes in Toronto could discourage move-up buyers from listing their homes for sale, with many of these households choosing to renovate instead. This means more modest homes will not become available for those looking for more affordable options. Council should be wary of any policy move that could interrupt households’ regular progression through the housing market over time.”
According to figures prepared by TRREB, the municipal land transfer tax on a $2 million home in Toronto would cost the buyer $36,475 in addition to the same amount paid through the provincial land transfer tax, for a total of $72,950. The real estate board noted that, at 4%, these properties are already the highest taxed in Canada.
Simeon Papailias, co-founder and managing partner of REC Canada, agreed and noted that, instead of buying a new home and paying two land transfer taxes, that money could be invested in a renovation that would augment a home’s value.
“This is a stupid idea—we’re talking about one of the two least affordable cities in Canada, and council wants to make it worse,” Papailias told CREW . “They would dissuade up to 20% of individuals thinking of selling their homes to increase the ladder because they’d purely renovate instead. ”
Ultimately, however , Papailias reckons that taxing Torontonians inside the hilt—especially without any discernible increase in treatments offered—would further erode affordability areas city that’s already losing home buyers to its exurbs, where construction is more affordable.
“It’s one thing to show this tax on a $2 huge number of home in Atlantic Canada, required . average price in Toronto certainly is not far off that number, ” he believed. “With fewer people listing personal homes, thereby further constricting produce, and buyers facing rapidly improving costs of moving up, this will subscribe to affordability issues. ”