The City of Toronto is being urged to change its stance on Land Transfer Tax and reduce its reliance on revenue from home buyers.
That’s the view of the Toronto Real Estate Board which has reacted to the City Council’s finance staff report that Municipal Land Transfer Tax revenue for 2018 was around $100 million lower than it had expected; this was due to fewer real estate transactions last year as the mortgage stress tests impacted the market.
The City Council has tabled a motion for consideration at the March 27 meeting which may result in an additional tier of Municipal Land Transfer Tax rates, above the current top tier, to fund the City’s Housing Allowance Program.
TREB president Garry Bhaura says the $100 million shortfall should be a wake-up call.
“Unfortunately, it appears that was not enough to scare them straight because this new proposal is calling for the City to rely on this unpredictable revenue stream even more. When will it end? It’s a slippery slope to rely on this tax as the ‘go-to’ funding source for initiatives that are more appropriately funded from reliable and stable sources like the property tax base,” he said.
More appropriate funding
John DiMichele, TREB’s Chief Executive Officer added that the board’s position has been clear.
“We have always told City Council that the Municipal Land Transfer Tax is a bad way to generate revenue, and that became obvious last year and during this year’s budget process. Housing our most vulnerable citizens should be done with stable and predictable revenue. As noted in the Councillors’ motion, it is anticipated that housing benefits will be introduced through the Federal National Housing Strategy. This is a much more appropriate and stable way to fund these needs,” he said.
TREB says it looks forward to working with City Council on this matter.
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