Investors in acquisition mode should allow for the municipal land transfer tax as two of Toronto’s three mayoral candidates have made it clear that its reduction or elimination will not be an option after the election.
The candidates took on the topic this morning in a debate at the Toronto Real Estate Board’s annual general meeting.
Doug Ford promised he would eliminate 15% of the land transfer tax as soon as he is elected, while John Tory would not commit to a reduction in the tax and Olivia Chow stated clearly that she will not reduce it.
The land transfer tax, which brings $350 million to the city, is charged to investors on a graduated basis, depending on the value of consideration paid for the property.
Chow said that if the land transfer tax was eliminated, it would increase property taxes by between 12 and 14 per cent.
Ford said he has budgeted for the reduction of the tax.
But Tory countered Ford by pointing out that Rob Ford had promised to eliminate the tax four years ago but never delivered. He added: “It hasn’t been done away with, and it won’t.”
The Toronto Real Estate Board supports the elimination of the land transfer tax by phasing it out.
Von Palmer, TREB's chief government and public affairs officer, said: “It's an unfair $8,000 burden home buyers have to pay upfront on the average Toronto home purchase, for no additional services.
“It also hurts the economy through reduced economic activity. First time home buyers, growing families and retirees looking to fund their retirement are among those hurt by this unfair tax.”
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