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Ontario: Ontario’s real estate lobby group says the provincial government has indicated it will allow cities outside of Toronto to levy their own land transfer taxes, despite the province’s assurances no decision has been made.
The move would raise hundreds of millions for cash-strapped cities dealing with ageing infrastructure but would also tack thousands of dollars onto the cost of an average home.
“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,” Patricia Verge, president of theOntario Real Estate Assocation said in a news release issued Tuesday. “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.”
Despite the OREA’s warning, Municipal Affairs and Housing Minister Ted McMeekin said in a statement to CP24 that the province is only reviewing the Municipal Act, with an aim to help cities “better utilize their existing financial tools and determine what, if any, barriers exist in the Act.”
“No decisions have been made,” McMeekin said.
The Ontario land transfer tax is levied at 0.5 per cent on the first $55,000 of the value of the property, 1 per cent on the next $195,000, 1.5 per cent on the next $150,000 and 2 per cent on anything above $400,000.
The province granted the City of Toronto the ability to raise its own land transfer tax in 2006.
In the City of Toronto, homebuyers pay the Ontario land transfer tax, plus an additional 0.5 per cent on the first $55,000 of the value of the home, 1 per cent on the next $345,000 and 2 per cent on the value above $400,000.
Toronto Mayor John Tory said Tuesday the city raises more than $350 million each year with its own land transfer tax.
Rebates of up to $2,000 are available for first-time homebuyers on the provincial land transfer tax, and up to $3,725 for the Toronto portion.
Verge said in the news release that during the 2014 provincial election, the Liberals said they would not extend the land transfer tax authority to other cities.
