OREA will work to prevent the spread of municipal land transfer taxes across Ontario.
What is the Issue
Some municipalities in Ontario have been asking the province to grant them the authority to charge a second, municipal, land transfer tax (LTT) on home buyers, similarly to the tax imposed by the city of Toronto.As a result of the municipal LTT, Toronto home buyers pay on average $15,000 in municipal and provincial LTTs, upfront, every time they move. For many people this creates a barrier to home ownership.
The spread of municipal LTTs to other regions of Ontario threatens to increase the cost of homeownership province wide.
I’m a REALTOR®. What does this mean for me?
Extending the power to levy the municipal LTT to Ontario’s municipalities would lower home values by adding thousands of dollars to the costs of residential transactions.
In addition, the municipal LTT would price many low and middle income Ontarians out of the real estate market entirely.
Currently, the city of Toronto is the only municipality in Ontario that has the authority to levy the municipal LTT in addition to the provincial LTT.
According to a recent CD Howe Institute study, the Toronto LTT resulted in a 16 percent drop in residential home sales volume. Moreover, higher transaction costs, owing to LTT, might force homeowners to tolerate living in ill-suited homes for longer than they would have otherwise.
OREA believes the municipal LTT is unfair because it forces a small segment of taxpayers, home buyers, to fund municipal services designed to benefit all citizens.
OREA urges the Ontario government to exclude LTTs from any legislation expanding municipal taxing authority and to revoke the tax in the city of Toronto.