The Toronto Real Estate Board has been lobbying vigorously to have as much of the land transfer tax repealed as possible, but now it’s changing tack by allowing voters to speak ahead of tomorrow’s provincial election.
The largest real estate board in the country sponsored an Ipsos Reid survey in which 77% of 1,200 GTA resident respondents favoured rolling the tax back and 68% supported a full repeal. Sixty-nine percent of respondents said housing affordability will influence how they vote in tomorrow’s election.
Doug Ford, the leader of Ontario’s Progressive Conservatives, supported phasing out the land transfer tax when he was a city councillor.
According to Von Palmer, the poll’s results signify havoc wreaked by the land transfer tax in Toronto, where he says housing mobility is stunted.
“Sixteen percent of sales have been affected every year,” said TREB’s chief communications and government affairs officer and chief privacy officer. “People are choosing not to move; they’re renovating their properties and staying put instead. What happens is you stop that flow throughout the market, so that missing middle we keep talking about—where you need people to buy that first home, move up to their second home as the family grows—is stalled and you’re not getting that flow through the marketplace. People are staying put and renovating their properties because of the cost of moving.”
The land transfer tax, added Palmer, is both backbreaking and exacerbating unaffordability.
“It’s a substantial tax, and you’re faced with it each time you move,” he said. “You have this land transfer tax that’s typically about 2%--in the City of Toronto right now, you’re faced with $15,000 on the average priced home, and then a provincial land transfer tax of $15,000—and that’s $30,000 you don’t just tack onto your mortgage.”
In addition to the provincial election, TREB has vowed to promote a repeal of the land transfer tax during municipal election season in October. The decision to lobby more actively during municipal elections is partly due to York Region’s proposed land transfer tax, which both TREB and the Ontario Real Estate Association lambasted, and which the likely outgoing Liberal government rejected.
In fact, OREA, in particular, decried the overwhelming burden that regulations and taxes put on entry-level buyers.
“We understand municipalities will always look for revenue sources, but the answer is not to punish aspiring homebuyers by putting the starter home further out of reach,” said Tim Hudak, CEO of OREA. “We were very pleased that all three parties in the past said no to another tax grab on the backs of homebuyers, and, certainly, each can speak to other ways to fund infrastructure, but let’s not do that by breaking the dreams of millennials who are looking for a place to call home.”
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