Realtors lobby against expanding land tax
Toronto levy is causing sellers to ‘stay put,’ real estate groups warn provincial politicians
Toronto-area realtors are lobbying provincial candidates against allowing a municipal land transfer tax to spread beyond the City of Toronto where home buyers effectively pay double the provincial land transfer fee.
Politicians from York Region are pushing the province to let them expand their revenue sources beyond property taxes.
Municipalities all around Toronto say they need the money to pay for the infrastructure and services required to meet provincially mandated population growth targets — costs that aren’t being covered by development.
A municipal land transfer fee would add $15,000 to the average home price in York Region, according to the Toronto Real Estate Board (TREB) and the Ontario Real Estate Association (OREA).
“Home buyers in Toronto are paying close to $30,000 in combined Toronto and provincial land transfer tax,” said association CEO Tim Hudak, former leader of the Ontario Progressive Conservative party.
“OREA fully understands the pressures municipalities face,” he added.
“We would simply argue that, next to alcohol and tobacco, housing is already one of the most heavily taxed items.”
In Toronto, Hudak says, the additional land transfer tax has discouraged people from moving.
“They simply stay put because it costs them $30,000 to move across the street. That means fewer starter homes are coming open as a result for firsttime home buyers,” he said.
Fewer listings also means higher prices and the loss of $68,000 in economic spinoffs for each lost transaction, which is bad for the economy, TREB president Tim Syrianos said.
“People depend on the overall housing (market) to be healthy to feed their families,” he said.
Property taxes are already higher outside the city of Toronto, so a municipal land transfer tax just increases the burden on homeowners there, Syrianos said.
“The consumer is going to pay more tax and it is going to affect supply. If it affects supply then homeownership becomes more unattainable,” he said.
York Region has asked the province for the same revenue tools as Toronto to help pay for services such as water and waste water, said Richmond Hill Mayor Dave Barrow.
“We’re all looking for new revenue sources. I’m willing to go forward with it as a regional issue and then each municipality has their options of whether they choose to opt in or not,” he said.
Land transfer isn’t the only potential money maker, he said. A rise in the municipal allocation of the provincial gas tax could also provide civic relief.
But, Barrow said, “growth should pay for growth,” and development charges and property taxes simply aren’t enough.
York Region estimates a municipal land transfer tax could raise between $350 and $430 million annually among nine municipalities.