TREB said it is particularly focused on making the housing market more affordable, mainly through changes to the municipal land transfer tax (LTT).
“TREB continues to believe that the land transfer tax should be phased out entirely,” says TREB president, Paul Etherington. “Nevertheless, we are focusing our current recommendations on actions that we believe are realistic and that can, and should, be taken starting with the City’s 2015 budget.”
The Toronto board said it will make two recommendations to the City’s budget committee, the first of which will suggest an increase to the maximum LTT rebate allowed for first-time buyers. TREB said it believes this will lift some of the pressure from social housing waitlists.
Toronto Mayor John Tory has been outspoken on the need for better social housing programs, though he hasn’t mentioned any cuts to the LTT.
“Currently, the highest LTT rate of two per cent kicks in on homes priced at or above $400,000, which was the average home price when this tax was first implemented in 2008, but is significantly below the current average Toronto home price, which was $610,000 in 2014,” said Von Palmer, chief government and public affairs officer for TREB. “This means that even purchasers of below average-priced homes are currently being forced to pay the highest LTT rate.”
In its press release, TREB said it wants to see the LTT rate thresholds be adjusted upward to account for inflation since the fee was implemented seven years ago.
“As a result of rising house prices since the land transfer tax was implemented, the average LTT paid to the City has increased by a whopping 102 per cent, but the maximum allowed rebate for first-time buyers has been left unchanged, significantly reducing the actual benefit to first-time buyers,” Palmer said, pointing to the second recommendation.
The real question, however, is whether or not these recommendations will be considered by the budget committee. Tory, who has made affordable housing a priority for his tenure as mayor, seems to be open to change.
“I think that there has to be a big priority placed on getting Toronto community housing right,” Tory told reporters last month. “There’s still lots to be done.”
Have your say: Will changes to Toronto’s LTT make the market more affordable to first-time buyers?
The Toronto Real Estate Board is turning to its members for input on the issues the board expects to bring forward during a budget consultation period.