“We’re $770 million in the hole. And this would add another $300 million,” Mihevc told CRE Online. “I think it’s got to stay. And you know what? Frankly, I think it’d be better if [TREB] put pressure on the provincial government to remove its share of the land transfer tax. We’re the poor cousin in the family, not them.”
The provincial government and the City of Toronto charge separate land transfer taxes on home purchases. Buyers of a home worth $450,000, for instance, would have to pay roughly $5,500 to the province and $4,700 to the city for a total $10,200 in land transfer taxes.
It was only a year ago that Ford declared at an election debate, “I am the only candidate that has put in my platform that I will abolish the land transfer tax as soon as I’m elected.” Now, as Ford approaches his one-year anniversary as the city’s mayor, many people are wondering if he actually will remove the real estate levy, especially given the city’s massive deficit.
TREB has continued to pressure the mayor to remove the land transfer tax, arguing that the levy unfairly targets homebuyers and keeps council from making the deep cuts it must to get the city’s finances in order.
Mihevc counters that the tax was introduced to keep property taxes lower and, as a result, help seniors stay in their homes longer.
“What we were trying to do when we brought in the land transfer tax was become less reliant on the property tax,” he said. “Another one of the reasons we did that is so we could keep seniors in their homes -- so you’re not pushing people who are house rich and cash poor out of their homes too early.”
The removal of the tax could drive property taxes up by 13% next year, an increase that would cripple the finances of many homeowners across the city, Mihevc said.
Even though Ford did promise to eliminate the land transfer tax last year, Mihevc said the majority of Torontonians will understand that the city simply can’t afford to lose the revenue.
“No one’s going to fault him for doing the right thing,” the veteran councillor told CRE Online. “And the right thing right now is to back off on that.”
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate