The Toronto Real Estate Board (TREB) says home buyers could be faced with new costs as a result of the new powers for the City of Toronto proposed by the provincial government.
 
Under Bill 53, Stronger City of Toronto for a Stronger Ontario Act, the City of Toronto would be given general authority to levy taxes with certain limitations. Land transfer tax is not included as one of those limitations, meaning that this option would be open to Toronto City Council if the legislation is passed.
“Most people agree that property taxes can’t sustain the level of investment needed for things like transit and infrastructure. But the answer is not a municipal land transfer tax. That’s just another tax on property,” says John Meehan, President of TREB, in a release.
 
Homebuyers already face a substantial provincial land transfer tax when they purchase a home. This tax is calculated as a percentage of the purchase price of a property and is payable in full when a homebuyer takes possession of the property.
 
The current provincial land transfer tax on an average Toronto home is approximately $3,900. This is intended to pay for real estate related administrative costs faced by the province for things such as land registry services, says TREB.
 
“It’s not clear what, if any, costs related to property transactions that a Toronto land transfer tax would be funding,” Meehan says. “Notwithstanding issues of fairness, a Toronto land transfer tax would be counter-productive. Many people are already choosing to live outside of the city because they simply cannot afford to live here. A Toronto land transfer tax would make this situation even worse, which in turn would mean less growth in Toronto’s taxable assessment base and more urban sprawl resulting in increased commuter gridlock, pollution and frustration levels,” Meehan says.
 
TREB has almost 23,000 members and is Canada’s largest real estate board.

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