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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
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Comments
re: people looking outside of toronto
it's not surprising actually, if the houses are more affordable elsewhere, then that's where they should live, let's face it, people are more practical these days and it's not like money comes easy these days
Posted by: Ontario Mortgage | Oct 26, 2007 12:58:45 PM
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