Toronto tax-payers live on easy street

Toronto homeowners just may be the most pampered, tax-sheltered, spoiled-rotten ratepayers in the GTA. The residential property tax hike to be approved at Toronto City Hall today or tomorrow is expected to be 3.75 per cent – among the GTA's lowest. Oshawa, in assessment-poor Durham Region, will hike taxes 4.61 per cent, and neighbouring Whitby, 5.67 per cent.

Little wonder residents outside the downtown core frequently write letters to the editor exasperated at Toronto's call for provincial funding of services. They look at a $380,000 house in Toronto and see a tax bill of $2,322, while a similarly priced home in Oshawa pays taxes of $5,745.

The owner of a $380,000 home in Pickering pays $4,270, while the Bramptonian pays $3,729 and residents of Markham, Mississauga or Vaughan pay more than $2,922. Toronto's neighbours wonder how Mayor David Miller can cry poor but refuse to tax Toronto homeowners at rates comparable to their municipal cousins.

Why is it that, hypothetically, a senior in Pickering can afford a 5 per cent tax hike, but Toronto politicians argue that a similar hike on a Toronto senior will push her out of her home?

See article in the Toronto Star »

March 31, 2008 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack

Tax-Deductible Moving Expenses

Have you moved recently? Do you know that you can deduct certain moving expenses on your next tax return, including transportation, packing and storage costs. Many people do not realize these tax benefits because they don't know what can be deducted.

If you are preparing to move, it's best to be informed beforehand so you know which receipts to keep. You may also find it worthwhile to pay for various services that are tax-deductible rather than doing them yourself.

The typical move involves a number of costs including hiring a company to transport personal effects and furniture, hotel stays and meals (if the move involves driving a long distance to a new home), and service fees to disconnect and reconnect utilities. In addition, renters who leave on short notice may have to pay the cost of breaking a lease.

Homeowners will incur closing costs and commissions on the sale of their home as well as legal and other fees on the purchase of their new home. This article will enrich your information about some tax deductible moving expenses.

To be able to claim moving expenses on your taxes, your move has to meet the following conditions:

Two groups are eligible to deduct a portion of their moving expenses: students moving away from home to attend school and people moving to a new area for a job or relocation by their employer. There has been a challenge to the rules regarding eligibility for the self-employed as you'll read later in this article.

Students

Students must fulfill two main qualifications: the distance between your home and school must be at least 40km (by the shortest public route) and you must be a full-time student. A full-time student is defined as someone who regularly attends a college, university, or other educational institution in a program at a post-secondary school level (whether in Canada or not) and is taking at least 60% of the usual course load during each semester.

As a student, you can only deduct eligible moving expenses from award income (scholarships, fellowships, bursaries, prizes, and research grants) that you report on your return. Your moving expenses must be greater than your award in order to deduct any moving expenses. As Revenue Canada's website reads, "If your moving expenses are more than the award income you report for the year, you can deduct the unused portion of those expenses from the award."

Although many students will not earn award income and will therefore not be able to deduct moving expenses, tuition fees themselves are a tax deduction. If a student has a part-time job, tuition can reduce taxes paid on those earnings. Students who meet the qualifications and have received award income can deduct the costs of travel, shipping and transportation of belongings, as well as items listed below under 'Expenses you can deduct'.

Employees

If you are moving for work (e.g. a company relocation or new job), are employed and establish a home at least 40 km closer to a new job than your old home, then you qualify to deduct moving expenses. Similarly, if you are self-employed, and you establish a home at least 40km closer to your new operational business than your old home, you also qualify to deduct moving expenses.

According to Revenue Canada, you must establish your new home as the place where you and members of your household ordinarily reside. For example, you have established a new home if you have sold or rented (or advertised for sale or rent) your old home.

Employed and Working from Home: an Exception to the Rule Until recently, employees who work from home and move have faced some restrictions regarding moving expenses. In the court decision Gary Adamson v. the Queen, Mr. Adamson had incurred moving expenses as an employee who was required to provide his own office in his home.

Expenses you can Deduct:

When your old residence is sold as a result of your move, eligible moving expenses also include:

Expenses that are not Deductible:

Remember to keep recipient and documents supporting your claims, you do not have to include those document in you tax claim but Canada Revenue Agency may want to see them at a later date.

Keep in mind that this article is for information only. The tax laws are frequently modified, we recommend that you visit the Canada Revenue Agency's website for specific details about which moving expenses you can claim or consult a professional accountant to maximize your tax return.

March 24, 2008 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Property assessment freeze lifted

Are big tax increases coming for Toronto homeowners?

The end of a three-year assessment freeze could mean homeowners in some parts of the province may face double-digit hikes in property taxes. The provincial assessment freeze ended on January 1st. However, the Ontario government says it plans to spread out any assessment increases over the next four years.

The freeze was initiated following several complaints from property owners to the Ontario Ombudsman’s Office that the Municipal Property Assessment Corporation (MPAC) was conducting inaccurate and unfair assessments. Following an investigation, the Ombudsman’s Office made 20 recommendations for improvements to MPAC’s assessment system including changes to the way the Crown Corporation communicated with property owners.

As of the last report, the Ombudsman stated that MPAC had completed 10 of the 20 recommendations and was moving forward on the remainder. Among the completed recommendations is a revised brochure that is sent out with reassessment notices. This brochure now mentions how important it is that MPAC’s information be accurate and urges people to report any inaccuracies. It tells them clearly how they can review their assessment and look at up to 24 property comparable's, through a section of its Web site called “About My Property.” It also stresses: “If an error has been made, we will correct it. We are also happy to explain how we arrived at your assessed value and answer any questions.” Finally, it explains all the various ways you can complain about or challenge your assessment. In addition, the MPAC Web site now offers a lot more information about how properties are evaluated, and has posted many of its procedures online.

A new Property Taxpayer Web Portal is also being developed, through which owners will be able to access their Property Profile Report and comparables. The assessment notice form itself is also being redesigned for 2008. MPAC has done internal consultations, focus groups and property taxpayer customer interviews about this new form – but it is still reviewing it, because of the potential impact of the province’s new four-year reassessment schedule.

In the meantime, the revised assessment process is under way and property owners will be receiving their assessments in August and September. Current property taxes are based on market value assessments conducted by MPAC for January 1, 2005, and are determined by comparisons with the average city property value. If the estimated value of a property increases at a rate below the city average, the homeowner's property tax will decrease. If property value increases at a rate above the city average, the tax will increase. The reassessed values, with a valuation date of January 1, 2008, will apply to the tax years 2009 through 2012.

March 7, 2008 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Toronto home buyer tax starts today

See Tax Calculator »

Buyers in Toronto's high-priced real estate market will be digging even deeper today as the city's newest tax goes into effect.  "Obviously the day has come. It's still a back-breaking tax," said Von Palmer, spokesperson for the Toronto Real Estate Board, which led a bitter fight last year to block the municipal land transfer tax. "We hope it does not affect the market in a negative way."

Sales increased after the tax was approved last October, Palmer said. In the first two weeks of January, Toronto sales were up 21 per cent over the same period in 2007, while in the 905 area – where the tax does not exist – sales were up by only 5 per cent.

"We're not suggesting it's because of the land transfer tax. That would be speculation," he said. "However, human nature being the way it is, some are wondering how to avoid the land transfer tax."

The tax, on both residential and commercial properties, is in addition to the existing provincial tax.

Purchasers are exempt from the Toronto tax if they signed a deal to buy before December 31, even if the deal closes after today. Also, first-time home buyers receive a rebate on purchases up to $400,000.

Frequently asked questions

How will I pay the land transfer tax?

It will be paid as part of the up front closing costs along with the provincial land transfer tax.

What rebates are available?

Rebates will be given to purchasers who signed sales agreements before Dec. 31, 2007, or are first-time home buyers.

How does the rebate for first-time home buyers work?

If you are buying a residential property with up to two single-family residences, you are eligible for a rebate of up to $3,725. If your house price exceeds $400,000, you pay 2 per cent on the remaining portion.

How will I get the rebate?

If it's a full rebate, you will receive it when your lawyer registers your property transaction. You will not be required to pay the tax then. But if the price of your home exceeds $400,000, you are eligible for a rebate of only the tax paid on the first $400,000, and the full tax will be collected when your lawyer registers your property transaction. Once your lawyer submits your rebate application, a rebate cheque will be sent to you.

If I signed my deal to buy a house in January but it has not closed yet will I pay the new tax?

Yes, unless you are a first-time home buyer.

February 1, 2008 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack

Toronto's "tremendous achievement"

Is this a strange characterization of higher taxes?

Toronto homeowners will face a 3.75 per cent property tax increase this year, as well as the city's new land transfer tax which comes into effect today. The Toronto land transfer tax, which comes into effect today, is expected to raise $175 million for city coffers. There will also be a non-residential property tax increase of 1.25 per cent.

According to the city, the property tax increase will result in an additional $80.70 in taxes on a residence worth $365,000, which is thought to be the average Toronto house price.

In a statement, Mayor Miller said, "This is a tremendous achievement for the city. Building a city that is livable and provides prosperity and opportunity for everyone is the most important role of local government. This budget allows us to start to make the kinds of investments Torontonians want and deserve. As a government, we have made difficult decisions over the past months and are now starting to turn the corner."

Miller's opponents on council are not impressed. They say the 2008 budget is just as unsustainable as the ones in previous years, the only difference being that the provincial bailout came early in the process instead of late.

Some councillors say the budget is a reflection of just how expensive it is becoming to live in Toronto with increased property taxes, land transfer fees, vehicle taxes and a new garbage fee.

The budget will go to a final vote at Toronto council at the end of March.

January 31, 2008 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack

Toronto property taxes up 3.75%

Homeowners will be facing a 3.75 per cent property tax hike.

City of Toronto officials will roll out an $8 billion spending budget for 2008 on Monday that sources say calls for a 3.75 per cent increase – almost identical to last year's 3.8 per cent. On the average home, that translates to about $80 extra.

The perennially cash-strapped Toronto is presenting a balanced budget this year, thanks to a land-transfer tax on home purchases that goes into effect next Friday.

See story in the Toronto Star »

January 26, 2008 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Toronto tax hikes predicted

Toronto Real Estate Board president says property tax assessments in the city are due for whopping rise

Ontario property owners will see a double-digit increase on their assessments because of the hot housing market and because the province's property assessment freeze has lifted, a real estate industry expert warns. Maureen O'Neill, president of the Toronto Real Estate Board, says the median price of a detached home in the GTA has increased about 20 per cent since the last assessments were done in 2005.

Three years ago, the median price of a detached home in the GTA was $335,000. Today, it's $403,000, O'Neill said. "Condominium and apartment owners will also see a whopping 27 per cent increase in their property assessments"

"In 2005, the median price of a condo or apartment was $192,000. Today, it's $245,000", O'Neill said. "They've seen appreciation and therefore they're going be taxed accordingly. Property owners are going to experience quite a dramatic shock."

Homes in east Toronto will be particularly hard hit, as assessments will rise about 31 per cent.

The province's three-year freeze on assessments lifted on January 1. The Ontario government, however, has introduced a plan to spread out any assessment increases over the next four years.

NDP Leader Howard Hampton, however, said the government's strategy, including the freeze, has made the housing assessment ordeal worse. "There's a big problem here. The property tax is not based upon someone's income, it's not based on my ability to pay," Hampton said.

The Municipal Property Assessment Corporation came under fire years ago for conducting inaccurate assessments. The agency performed 500,000 on-site inspections last year in its bid to boost accuracy.

Property owners will be receiving their new assessments in August and September.

January 24, 2008 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Land Transfer Tax Information

Details about extending the Land Transfer Tax First-Time Home Buyers Refund to include Resale Homes

In Ontario Economic Outlook and Fiscal Review released on December 13, 2007 the Provincial Government proposed amendments to the Land Transfer Tax Act,  which when becoming law, would extend the Land Transfer Tax Refund Program for First-Time Homebuyers to include purchases of resale homes.

The maximum refund would be $2,000 and apply to Agreements of Purchase and Sale on resale home entered into after December 13, 2007.

See the government bulletin outlining details of the changes »

January 10, 2008 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Toronto's new tax implemented

Home buyers in Toronto can no longer dodge a new land transfer tax, as the deadline came and went Monday for exemption from the city-imposed fee. The controversial tax, assessed at 0.5% to 2% of the sale price, can add thousands of dollars to the final cost of homes.

The Toronto land transfer tax will take effect on February 1, but purchasers had until December 31 to buy a home to be exempt from it, with the closing date to be no later than February 1.

Sales made to first-time home buyers under $400,000 are also exempt from the new Toronto land transfer tax.

The tax is one of two new taxes approved by Toronto city council in October as part of its response to a $500-million budget shortfall.

Since the vote, real estate agents observed a rush by homeowners to sell their homes before December 31, in the hope of avoiding the tax. Agents are predicting a slowdown in Toronto's real estate market this year.

Combined, the land transfer tax and a vehicle registration tax are expected to raise about $175 million this year for the city, as well as about $300 million in subsequent years.

The $60 per vehicle registration tax takes into effect later this year.

January 3, 2008 in Toronto Real Estate Taxes | Permalink | Comments (1) | TrackBack

GST Rate Reductions re: New Housing

On October 30, 2007, the Government of Canada announced in its Economic Statement that it proposes to reduce the GST rate by one percentage point from 6% to 5%, effective January 1, 2008. To facilitate the transition to the lower rate, the Economic Statement also proposes transitional rules for determining the GST/HST rates applicable to transactions that straddle the January 1, 2008 implementation date.

This info sheet reflects the proposed amendments to the Excise Tax Act. Any commentary in this publication should not be taken as a statement by the Canada Revenue Agency (CRA) that these amendments will be enacted in their current form.

See Info Sheet [PDF*]

December 28, 2007 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Land Transfer Tax Rebates

Ontario Program (LTT)

First-time home buyers who purchase a new or resale home will receive a rebate of the Provincial Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum Provincial LTT rebate is $2,000.

Details

The 1996 Ontario Budget announced a special one-year provision to the Provincial LTT that was renewed every year and is now a permanent program.

FIRST-TIME BUYERS who purchase a new home will receive a rebate of the Provincial LTT. All other buyers will continue to pay the full applicable tax.

The maximum rebate is $2000. If an individual owns less than 100% interest in the newlybuilt home, the amount of the rebate would be reduced and calculated according to the amount of interest in the home.

A rebate of $2,000 is equivalent to the Provincial LTT payable on a purchase price of $227,500 (net of GST).

Only individuals who are at least 18 years of age, have not (or spouse) previously owned an interest in a home anywhere qualify for the rebate.

Individuals who have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of the Provincial LTT do not qualify.

A real estate transfer tax is assessed on real property when ownership of the property is transferred from one party to another. The Provincial Land Transfer Tax is a percentage of the value of the property based on a graduated scale:

For more information call the Ontario Finance Ministry at 1-800-263-7965.

Toronto Program (TLTT)

First-time home buyers who purchase a re-sale or newly constructed home will receive a rebate of the Toronto Land Transfer Tax (TLTT).

Details

The City of Toronto provides a rebate of the TLTT to first-time home buyers of re-sale or newly constructed homes.

The maximum Toronto rebate is $3,725 (equivalent to the TLTT payable on a $400,000 home).

According to the City of Toronto, eligibility rules for the TLTT first-time buyer rebate will mirror provincial rules, as follows: The purchaser must be at least 18 years of age.

The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.

The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.

If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world while he or she was the purchaser's spouse. If this is the case, NO refund is available to either spouse. Note: If a purchaser's spouse owned an interest in a home BEFORE becoming the purchaser's spouse, but not while the purchaser's spouse, the purchaser may be eligible for some rebate.

The tax is a percentage of value of the property based on a graduated scale:

For additional information, contact the City of Toronto at 416-338-0338

Although we believe the above information is accurate it is not intended to be legal or financial advice. We accept no responsibility for any loss arising from any use or reliance on the information contained herein.

December 16, 2007 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack

Homebuyers' get tax break

Finance Minister Dwight Duncan has an early Christmas present for first-time homebuyers – a tax break of up to $2,000. In his fall economic statement yesterday, Duncan also came to the aid of struggling manufacturers, laid-off workers, and transit riders with $3 billion in tax cuts and new spending.

Expanding this Land Transfer Tax refund is an important part of our government's commitment to helping Ontarians buying their first home," Duncan said.

Effective midnight tonight, first-time buyers of resale homes, as well as newly constructed homes, would be eligible for a refund from the provincial government of up to $2,000 of the Land Transfer Tax paid.

The expanded Land Transfer Tax Refund Program for First-time Homebuyers is part of a package of new tax initiatives announced in the 2007 Fall Economic Outlook and Fiscal Review that would provide $1.4 billion in provincial tax relief for business and people over three years.

Von Palmer, of the Toronto Real Estate Board, wants the "backbreaking tax" scrapped entirely but said the rebate, which is available to all first-time buyers, is a start.

In Toronto, someone buying a $420,000 home – the average price in the city – would pay $4,875 in provincial land transfer taxes, Palmer said. Yesterday's rebate would knock that down by $2,000 – the maximum.

For more information visit: http://www.gov.on.ca

December 14, 2007 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

BMO offers to pay new Toronto tax

The Bank of Montreal is offering to ease the tax burden on new homeowners by offering to spring for some of the costs. BMO announced it would pay Toronto's new land transfer tax for their clients who close on a new home purchase by February 2008.

The customer also needs to sign on to a fixed closed mortgage with a minimum five-year term. The bank will cover the land transfer tax up to 1.5 per cent of the mortgage.

The Toronto Real Estate board has reported more people are rushing to close on property deals to avoid having to pay the tax, which comes into effect next year.

"Purchasing a home is the largest investment most of us will ever make," said Cid Palacio, vice president of BMO Bank of Montreal, in a news release.

"It's important that Toronto homeowners don't feel pressured into making a purchase decision based on this new tax."

Under the city's regulations, first-time homeowners will get a rebate on the new tax if their house costs less than $400,000.

Under the tax, people will have to pay:

Here are a few examples of what a homeowner might pay with the new land transfer tax:

"We know the impact of this new tax can be significant for potential buyers, particularly when you add up other associated costs of home ownership," said Alex Dousmanis-Curtis, BMO senior vice president for the Greater Toronto division. "Our advice is to speak with a mortgage expert and explore the variety of options available to you before rushing into a decision."

November 20, 2007 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Toronto's pre-tax real estate push

The new land-transfer tax puts rush on real estate deals

Toronto’s bullish real estate market, which has set a series of sales records this year, has grown suddenly more frantic, as buyers (and sellers) try to get their sales completed before the new land-transfer tax takes effect early next year.

The National Post's Adam Huras and Will Tremain report:

The tax — approved by city council on Monday, it kicks in on Feb. 1 — will add $3,725 to the price of a $400,000 home. The average Toronto home is priced just below that.

“I’ve noticed in the last couple days an influx in showings I have listed right now. It looks like people are rushing to buy just to save on the tax,” said Bill Balamatsis of East York Realty Ltd., who estimates viewings are up about 25%. “I have one property listed at $1.4-million, and right after the announcement I started getting showings on it.”

Ann Hannah, owner and broker of record for Sutton Group Old Mill Realty Inc. in Etobicoke, said her brokerage is telling clients to buy or sell soon.

“They’re certainly concerned about the new land-transfer tax,” Ms. Hannah said. “All buyers and sellers; it’s going to affect the whole market. If you’re selling and the land-transfer tax is going to apply, it’s going to affect your sale price.”

Jordan Grosman of Team Wagman Forest Hill Real Estate Inc., said several clients have asked to expedite closings before year-end, especially on higher-priced homes. Several Toronto realtors have had clients whose deals are to close in February ask to be bumped up to December.

“My buyers who have been contacting me are getting more frantic. My buyers seem more eager to buy right now, and a lot of people are trying to close earlier so they start buying themselves,” Mr. Grosman said.

“We’re having people buy a place [in December] and not move in, and have [the sellers] still live there rent-free, pay their own bills, but take the money from the sale and buy a place [before December] in order for both parties to avoid the higher land-transfer tax,” he said. “These people are actually going to their own lawyer to write up a clause because I don’t have anything that says anything like that. But it will definitely be in my database after this offer.”

Under the compromise deal council approved, Torontonians buying a home will be taxed at between 0.5% and 2%, depending on the sale price. The tax would add $2,225 to the price of a $250,000 house; $7,725 to a $600,000 house; and $15,725 to a $1-million home.

People who buy by Dec. 31 will receive a full rebate regardless of the closing date. First-time buyers will get a rebate for the tax on any home valued at $400,000 or less. Realtors also said their clients are now looking outside of Toronto.

October 25, 2007 in Toronto Real Estate Taxes | Permalink | Comments (1) | TrackBack

Realtors still fretting about land tax

Toronto Realtors are worried about what will happen to the market in the city now that the land transfer tax has been approved. Brad Lamb is widely known as Toronto's "condo king." He said about 8,000 new condo developments go up in the city every year and council is basically killing what he calls "the golden goose."

"It's a shot at the arm, not through the heart ... but it's still not smart," Lamb said. "It's not what his council should be doing. This council should be embracing housing and seeing it for what it is, which is one of the few bright spots of the Ontario economy."

He said this will affect Toronto in a negative way, suggesting that people are resourceful and can make their livings in other cities across Canada and around the world.

An Environics poll comissioned by the Toronto Real Estate Board shows 62 per cent of Torontonians think the land transfer tax is an unfair solution to the city's financial challenge and that 61 per cent wanted their councillors to vote against it.

October 24, 2007 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

'Home stretch' for Toronto tax vote

Both sides of debate on vehicle registration and land transfer tax gear up for final week of lobbying

It's a week to go until the crucial October 22 vote at city hall, and groups for and against the land transfer tax and vehicle registration fee are strategizing over how best to influence Toronto councillors.

"Clearly we're in the home stretch. This is a critical time," said Von Palmer, a spokesperson for the Toronto Real Estate Board, a group vehemently opposed to the house purchase tax Mayor David Miller wants to implement to address the city's serious revenue shortfall.

Leading up to the July vote at city hall on the two controversial taxes, groups like the real estate group and Toronto Board of Trade lobbied councillors heavily.

See full story in the Toronto Star »

October 15, 2007 in Toronto Real Estate Taxes | Permalink | Comments (4) | TrackBack

Toronto must impose its new taxes

Toronto's Mayor Miller said yesterday the Liberals' success in Toronto on election night (taking 18 of 22 seats) was a barometer of the public mood on new taxes, despite the rhetoric of his opponents and an anti-tax campaign run by the Toronto Real Estate Board and other groups.

See the full story.

October 12, 2007 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

Artists rally for fair-tax plan

About two hundred Toronto artists took to Nathan Phillip’s Square last week to rally in favour of the proposed land transfer and vehicle registration taxes that council will vote on in October. Their message: if you want a healthy, vibrant city, you gotta pay for it.

“Our mayor’s initiative to fix this broken structure immediately is Toronto’s only fiscally responsible option. We should all take to it like a duck to water!” said a shirtless Lief Harmsen wearing an inflatable duck-shaped pool toy around his waist. “Our city will be nothing if we support the politicians who try to duck responsibility!”

Instead of lecturing the city about finding efficiencies or getting their financial house in order, speakers at the rally turned their attention towards the questionable tactics and claims of the Toronto Real Estate Board. Councillor Adam Vaughan told the crowd how the board warned him that if he didn’t vote against the new taxes, they would make sure he lost the next election.

Harmsen argued that homeowners will still enjoy hefty profits when they sell their house if the new land transfer tax becomes a reality. “Real estate is sold at the highest price the market can bear. Land transfer tax cannot make a difference to what buyers can afford to pay in total. It can therefore only affect the seller’s capital gain,” he reasoned. “Your capital gain in this town has been fabulously gigantic if you’ve owned your home for a while. Having a working, vibrant city is ultimately what gives land here real value.”

September 24, 2007 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack

A builder's take on Toronto's taxes

A top official of Daniels Corporation, a big Toronto-area condo and home builder, was among those who showed up at city hall last week to back the mayor's campaign for new taxes. "If we don't have proper city amenities like transit and other factors for a sustainable city, then people aren't going to want to buy condos irrespective of whatever tax they pay," said Niall Haggart, vice-president of Daniels.

Haggart conceded that no one likes more taxes, such as the mayor's proposal for a land transfer tax that would bring in $300-million a year. But, he said, "we all have to face up to reality. "Was I having a big problem with the land transfer tax?" he asked. "I was not."

That view is at sharp odds with the Toronto Real Estate Board and other anti-tax business groups poised for round two of the fight.

For all the talk of taxes in Toronto, Mr. Haggart said, the news media are paying scant attention to tax issues outside the city.

In Mississauga, for example, the city charges development fees of $14,000 for one or two bedroom units (a cost passed on to buyers), compared to less than half that rate in Toronto. As well, he says, the region of Peel is proposing a 79-per-cent hike in development charges to $15,000, up from $8,500 currently.

"Where are all the media?" he asked. "Where is the press?"

September 17, 2007 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack

Toronto's fair tax plan

"A great city does not come for free"

A message Toronto's Mayor Miller:

Fellow Torontonians,

The debate over Toronto’s fiscal situation is really part of a much larger debate about the City we want Toronto to be. The Toronto I want to build and the city Torontonians voted for last November is one with excellent public services — a city that is prosperous, livable and provides opportunity for all.

But a great city does not come for free. Toronto remains the only large world city that does not have access to sources of revenue that grow with the economy. Simply stated, Toronto does not have the money needed to pay for the critical services we have all come to rely upon, let alone to invest in our city. Without new revenues and greater control over our own future, we will all see and feel the effects of service cuts that take this city backward. That’s not my city.

City Council has an opportunity on October 22 to approve a new Land Transfer Tax and a Personal Vehicle Registration Tax that together would generate more than $350 million every year. That would put us on the path to a sustainable future.

I know that no new tax is ever popular. But expecting homeowners and businesses to bear the burden of double digit property tax hikes is unfair. Seniors on fixed incomes and small businesses would be devastated. A sales tax on the purchase of property, with rebates for first-time buyers, is far more reasonable than property tax increases of 18 per cent for residents and 6 per cent for businesses. Our proposal is a fair tax plan for Toronto.

The choice is clear. What is at stake is nothing less than the future of our great city and the very quality of life we currently enjoy.

Sincerely,

Mayor David Miller

See the Fair Taxes for Toronto website »

September 14, 2007 in Toronto Real Estate Taxes | Permalink | Comments (0) | TrackBack

The Toronto Board says ...

Torontonians deserve a more thoughtful and fair approach to the City’s financial challenges.

In response to recent City of Toronto announcements regarding its fiscal situation, Toronto’s Realtors are calling on Mayor Miller, City Councillors and provincial politicians to consider the options preferred by Torontonians, instead of just new taxation or cuts to core services.

Realtors have been watching the actions of City and Provincial politicians since Toronto City Council decided to defer consideration of a second land transfer tax, which would mean a 100 per cent increase, or over $4,000 in extra costs for the average Toronto home buyer, if approved.

“The public has been clear that a second land transfer tax is simply not a fair way to address the City’s budget shortfall. It discriminates against homebuyers by forcing them to shoulder a disproportionate and unfair burden,” said Donald Bentley, President of the Toronto Real Estate Board (TREB). “The second land transfer tax should be taken off the table immediately and the public should be given thoughtful choices instead.”

TREB points out that a second land transfer tax will impact average people. According to the Canada Mortgage and Housing Corporation, in Toronto’s condominium market, where most investment activity occurs, approximately 80 per cent of units are owned by people who live in them. Investment activity is even lower when all residences are considered.

“Realtors know first hand that the Toronto real estate market is dominated by people buying homes to live in them, not by investors or speculators,” added Bentley. “A second land transfer tax will be felt the most by real, hard-working, people with the dream of home ownership. In today’s market, it is not uncommon for these people to move every five years or so; they will feel the sting of the second land transfer tax many times”.

Realtors believe that a fair approach to addressing Toronto’s fiscal situation should include immediate and adequate provincial action, prioritizing the City’s core services, and making sure services are delivered efficiently.

“The choice isn’t simply between new taxes or cuts to core services. The public knows better and they deserve better. There are other options. The City has to get its house in order and all provincial politicians have to step up to the plate with firm, adequate and immediate commitments,” said Bentley. “The recent announcements from the Provincial Party leaders regarding municipal finances show that public opinion is having an impact, but the public is expecting and demanding more.”

While TREB believes that provincial action is a key part of the solution, Realtors are also calling for an impartial third-party review of the City’s budget so that the public can have an accurate understanding of the City’s fiscal situation.

“The public has the right to demand openness so that they can truly understand what makes up the City’s shortfall. The City shouldn’t be hesitant to ask for a second opinion on where savings can be found and other options,” added Bentley.

Realtors are also questioning the City’s current approach to cost containment, noting that the City’s Deputy City Manager and Chief Financial Officer is currently in the process of determining what the City’s core services are.

“Frankly, it’s shocking that the City would choose to pursue new taxes before identifying discretionary services. The public know their priorities and they expect the City to focus their existing tax dollars on those core services, while finding savings in discretionary areas. The City’s recent cost containment efforts seem to have ignored various options that may be preferred by the public”, said Bentley.

August 29, 2007 in Toronto Real Estate Taxes | Permalink | Comments (1) | TrackBack

Toronto's land transfer tax debate

Toronto Realtors say city's land transfer will be unfair

The Toronto Real Estate Board (TREB) has told the City of Toronto that its proposal to charge a second land transfer tax treats home buyers unfairly. TREB’s comments were made in a formal presentation to the City’s Executive Committee last week. If the City moves forward with the proposal, the average Toronto home buyer will pay another $4,200 in land transfer tax. That is a 100 per cent increase, and would give Toronto the highest land transfer taxes in Canada and the second highest in North America.

“A second land transfer tax discriminates against home buyers. The City doesn’t provide any land transfer related services, so this tax is just a way of forcing home buyers to pay for services for everyone. That, simply, is unfair,” said Dorothy Mason, President of the Toronto Real Estate Board.

The Toronto Board also pointed out that the proposed second land transfer tax is most unfair to those who can least afford it – people who have small down payments and, therefore, can only qualify for a mortgage by also paying for mortgage insurance.

“Many home buyers will have no choice but to take money from their down payment to pay this tax, which would mean extra mortgage interest and higher mortgage insurance premiums. For the most vulnerable, this means that the second land transfer tax will actually cost over $15,000. The City will literally be forcing people to take out a mortgage to pay a tax. That is unfair,” Mason said.

TREB also noted that Toronto residents and businesses can’t even expect that the new money the City collects from this tax will result in any improved services.

“The Mayor and City staff have admitted that the money Toronto takes from home buyers will be used to fill the holes in the City’s current budget, not to expand or improve services. It’s not fair that home buyers will be paying more for the same service”, Mason said.

“A second land transfer tax will make the dream of home ownership more difficult to achieve. Toronto’s REALTORS® are protecting the interests of home buyers by strongly opposing the City’s proposal. "We plan to keep up the fight," said Mason.

July 2, 2007 in Toronto Real Estate Taxes | Permalink | Comments (1) | TrackBack

 

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