Photo: Brendan Lynch/Flickr
Doug Ford, echoing the political promises of his brother Mayor Rob Ford, announced yesterday that if he ran the city, he’d cut back the Municipal Land Transfer Tax (MLTT) substantially.
He pledged to reduce the tax by 60 per cent during his term, or 15 per cent each year, without reducing services. Trimming the tax would require the co-operation of council, something Mayor Rob Ford had been unable to do during his tenure. Doug’s plan to cut the tax is more ambitious than his brother’s last proposal. In late 2013, Rob Ford called it an “unfair tax” and said he’d like to see it reduced by five per cent (in 2010, he called for its total elimination).
Mayoral candidates John Tory and Olivia Chow both told reporters that they would not shrink the tax and the issue has remained in the news just about every time that council worked out the city’s budget.
For 2013, the tax brought in about $357 million. The amount of revenue was 13.2 per cent higher than what the city had budgeted and a 3.6 per cent boost over the 2012 total.
In other words, as property values have gone up and sales remain strong, the tax has become a bigger and bigger source of revenue for the city. Aside from the Fords, it has its opponents, namely the Toronto Real Estate Board (TREB), which has long been vocal about their desire to see the tax eliminated. They released a statement on October 1st, supporting Ford’s promise to phase out the tax.
First introduced in 2008, the MLTT is based on property values and is levied on a graduated basis. It impacts properties that contain at least one, and not more than two, single family residences. The first $55,000 of your property value would have a tax rate of 0.5 per cent; then you’d tack on a tax rate of 1 per cent for the the next $55,000.01 to $400,000; if the home is worth even more, you would add a rate of 2 per cent for the outstanding amount valued at $400,000 or more (see here for more details).
Using Ratehub’s Land Transfer Tax calculator, if your home was valued at $447,301, the median sale price for an existing Toronto home in 2013, you could expect to pay $4,671 for the MLTT, plus $5,421 for the Ontario Land Transfer Tax. Thanks to rebates, if you are a first-time buyer, you’d get $5,725 back (the Ontario rebate maxes out at $2,000, while the Toronto rebate maxes out to $3,725).
Want to see more of the nitty-gritty details about how much money the tax has raised for the city? Check out our chart based on City of Toronto data: