The Ontario Ministry of Municipal Affairs and Housing plans to give every municipality province wide the power to charge a Municipal Land Transfer Tax (MLTT), says the Ontario Real Estate Association (OREA).
“Ontario home buyers are already charged a provincial land transfer tax, so by adding a municipal tax, they’re essentially doubling the tax burden on Ontario families,” says Patricia Verge, president of OREA. “If the Ontario Liberals follow through with this plan, home buyers will be forced to pay $10,000 in total land transfer taxes on the average priced home in Ontario, starting as early as next year.”
OREA says the provincial government is currently undertaking a public consultation on changes to the Municipal Act. It says that the ministry “has indicated that they will move ahead with granting municipalities across the province the ability to impose a municipal land transfer tax, disregarding views expressed by Ontarians during this important public process.”
Verge says, “The Ontario Liberals wrote to us in May 2014, during the election, stating that ‘they had no
plans to extend these powers to municipalities’. On behalf of home buyers, we want them to remain good on this election promise and that means Ontarians need to send a strong message that the government must rethink its plan to double the land transfer tax burden on home buyers.”
The City of Toronto has had an MLTT in place since 2008. OREA says that has resulted in “significant negative impacts on jobs and the economy. Over five years, it is estimated that 38,227 housing transactions did not occur in Toronto because of the MLTT.
“With every home transaction generating $55,000 in consumer spending on things like renovations, furniture, appliances and fees to professionals, the MLTT has cost the City of Toronto $2.3 billion in lost economic activity and 15,000 jobs. This type of effect would be multiplied across Ontario if the government moves ahead with its plans,” says the association.
OREA has the support of the Canadian Taxpayers Federation (CTF).
“Owning a home used to be the norm, but now with a myriad of taxes and fees, it’s becoming little more than a dream. If municipalities are granted the power to double the land transfer tax, homebuyers could be forced to pay $10,000 to $15,000 in land transfer tax for a home priced at $450,000,” says CTF Ontario director Christine Van Gin.
“Mayors and provincial politicians like to talk about what can be done to make housing in Toronto and Ontario more affordable, but the reality is they need to look in the mirror. It is policies like the land transfer tax, HST on new homes, subway construction levies, development charges and convoluted and irrational building codes that drive up the price of housing,” says Van Geyn. “If the premier and Minister of Municipal Affairs Ted McMeekin give the municipalities the power to double the land transfer tax, they’ll be driving the dream of home ownership even further away from Ontarians.”
OREA has launched a website to present its case opposing the tax.