Energy efficiency law hits homesellers
Mandatory energy audits on home sales wrong, Toronto's
real estate agents say.
In the wake of a new municipal land-transfer tax and unmoored by a sinking economy, Toronto real estate agents are bracing for a new storm on the legislative horizon: Mandatory energy audits for home sales.
Ontario Minister of Energy and Infrastructure George Smitherman's proposed Green Energy Act, which was introduced to the Ontario legislature Monday, contains loosely defined "mandatory conservation and energy efficiency practices" that would cost home sellers about $300.
But with homes lingering on a stagnating market, and average sale prices dropping throughout the GTA, even the distant possibility of one more fee or one more bureaucratic obstacle, leaves real estate agents feeling seasick.
"It's not so much the dollars that it costs you to do the audit, I think you have to think long-term in terms of how will that impact your property value, what will that do to the market in terms of potential bottlenecks," said Von Palmer, spokesman for the Toronto Real Estate Board. "So the devil's always in the details and I think that's where we need to be careful."
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Constraining the supply of homes for sale by raising selling costs will not 'improve the situation'. Selling costs (legal fees, commissions, staging, etc) are taken into consideration by home sellers, which affect the price that they want for the home. Prices artificially inflated by what is, in effect, a tax on home transactions, diminishes demand by buyers. In addition, a large proportion of home sellers are also buying another home, so even if the fees are being completely absorbed by sellers, it is still affecting a large proportion of buyers.
Posted by: Rebecca Laing | Mar 3, 2009 6:24:06 PM
Energy efficient homes are just smart. This is the new wave of the future especially in the current downturn of our economies.
Posted by: Prince William Homes | Mar 1, 2009 8:11:49 PM
This cost is paid by the seller, while the Toronto land transfer tax is paid by the buyer. Since the problem right now is not a lack of sellers but a clear lack of buyers, I don't see why this is a problem.
If anything, less listings on the market will reduce supply and improve the situation, no?
Posted by: | Feb 26, 2009 7:35:09 AM
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