The bad news for the real estate profession, however, is that agents should continue to advise clients to stash something away for Toronto’s land transfer tax, with all three of the city’s mayoral frontrunners rejecting its outright elimination.
The candidates took on the topic earlier this week in a debate at a general meeting of the Toronto Real Estate Board.
Doug Ford promised he would eliminate 15 per cent of the land transfer tax as soon as he is elected, while John Tory would not commit to a reduction in the tax and Olivia Chow stated clearly that she will not reduce it.
"TREB supports Councillor Ford's commitment to reduce the Land Transfer Tax,” said TREB president Paul Etherington. “We believe John Tory understands the problems with the Land Transfer Tax and we hope that he will articulate a plan to provide the relief from this tax that voters want. On the other hand, TREB does not support Olivia Chow's proposal to increase the Land Transfer Tax. City Hall should be reducing its reliance on this unfair and hurtful tax, not increasing it.”
The land transfer tax, which brings $350 million to the city, is charged to home buyers on a graduated basis, depending on the value of consideration paid for the property.
Chow said that if the land transfer tax was eliminated, it would increase property taxes by between 12 and 14 per cent.
There’s at least one agent in the city, however, supporting the tax. Brendan Powell says the city needs the revenue the tax brings in.
“Toronto needs the money and I don’t think that anyone has a good plan to replace that much income for the city,” he says. “Nobody likes tax, it’s a huge cost for buyers and yeah it probably would have an impact on real estate transactions… [but] I’ve never seen the land transfer tax make or break a decision to buy a house. It’s just another painful piece to a larger puzzle.”
Ford said he has budgeted for the reduction of the tax.
But Tory countered Ford by pointing out that Rob Ford had promised to eliminate the tax four years ago but never delivered. He added: “It hasn’t been done away with, and it won’t.”
The Toronto Real Estate Board supports the elimination of the land transfer tax by phasing it out.
Von Palmer, TREB's Chief Government and Public Affairs Officer, said: “It's an unfair $8,000 burden home buyers have to pay upfront on the average Toronto home purchase, for no additional services.
“It also hurts the economy through reduced economic activity. First time home buyers, growing families and retirees looking to fund their retirement are among those hurt by this unfair tax.”
Elections are always a good time for voters to look for “incentives” from the politicians begging for our votes and this week Toronto’s mayoral candidates have weighed in on Land Transfer Tax.