The mayor may have more ammo than ever before as the Toronto Real Estate Board recently singled out the land transfer tax for depriving the economy $250 million in economic spinoffs, causing sales to decrease in the 416 and contributing to a shortage of new listings.
An interesting piece by Susan Pigg highlighting the real estate world’s quibbles with the land transfer tax appeared in The Star’s Moneyville this week.
Here are a few interesting points from Pigg’s article:
- Toronto is the only city in Canada to impose a land transfer tax on top of the provincial tax.
- On top of the average Toronto home price ($572,159), a buyer has to pay $15,086. This is $7,100 more than the same home in the suburbs.
- Thanks to Toronto’s booming housing market, the city could earn $330 million by the end of 2012 through the tax.
- TREB is tracking a “discrepancy” between the level of homes sales in the 905 region and the 416 region.
- In February sales were up year-over-year in the 905 by 23 per cent while the 416 only saw a 6.3 per cent rise.
- Pigg quotes Realtor Thomas Cook who says the tax is one factor discouraging homeowners from moving up or downsizing.
- Cook also said some homeowners are opting to renovate, rather than move, which is also leading to a shortage of new listings.
- Von Palmer, chief government and public affairs officer at TREB, estimates that $250 million in economic spinoffs is being lost with lost transactions numbering 5,800 and each transaction generating approximately $40,000 in economic spinoff.
The ball is still in Ford’s court. During his campaign he promised to scrap the tax entirely by 2011, but now there’s speculation as to whether he could get the votes on city council to repeal the tax.
We’ll keep an eye on the situation as it develops.