Weak December strenghtens land transfer tax critics

by Vernon Clement Jones05 Jan 2013

“Stricter mortgage lending guidelines resulted in some households postponing their purchase of a home,” said Toronto Real Estate Board President Ann Hannah, in revealing the numbers Friday. “In the City of Toronto, the dip in sales was compounded by the additional Land Transfer Tax, which buyers must pay upfront.”

That sentiment mirrors the reaction of many Realtors, concerned the levy has further stalled a slowing market by encouraging buyers to sit it out.

TREB numbers point to a 19.5 per cent slide in home sales for December compared to the year-ago period. That translates into a drop of 895 homes from the 4,585 trading hands in December 2011. Condo sales suffered a more-precipitous decline, falling 27.5 per cent, although actually selling prices fell less than 1 per cent.

Taken as a whole, that market about-face is strong indication the City of Toronto should do away with its controversial land transfer tax, says TREB.

It has led the charge against the tax, introduced in 2008 and responsible for generating $330 million in 2011, alone. The cost to buyers adds another $5,351 to a $481,305 home, near the city’s average, and gets tabbed onto its provincial counterpart.

Last summer TREB campaigned to have the city’s embattled Mayor Rob Ford make good on a pledge to abolish the tax.

He suggested a 25 per cent cut could come as early as late last year. That hasn’t happened, with many other councillors arguing a city struggling to maintain services simply can’t afford to give up the revenue.

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