I'm usually not one to mix politics with real estate. I'm not here to endorse any kind of political bent on who is better beit from the left, right, or centre. This week, however, I have seen quite a few pieces on how some candidates running in the next civic election would deal with the Toronto Land Transfer Tax, and I hope that this land transfer tax is seriously revised.
Now, before we get into this, let's look at a brief history of land transfer tax in our city:
Originally, the Ontario Land Transfer Tax started in 1974. Like many taxes, the government was looking for ways to increase revenues, and in turn, the Ontario Land Transfer Tax was created. The provincial tax has been around for a long time, and it won't be going anywhere soon.
Then in 2008 David Miller brought in the Toronto Land Transfer Tax – a city version to add to the provincial land transfer tax. It is understandable why someone would need to bring in more money at that point, especially since the previous Mike Harris provincial government downloaded many of its costs on to Toronto. Because of this, Toronto needed to find a new revenue stream fast. Of course, I don't think the Toronto Land Transfer Tax was the way to go about it.
In addition to the Ontario Land Transfer Tax that people were paying for years, the Toronto Land Transfer tax practically doubled the amount of taxes paid out. And these are not small sums of money. For a $750,000 house purchase, you are paying $22,200 in both taxes. It 's easy to understand why people are not thrilled about it.
With that said, let's not make this about moaning over having to pay taxes. I understand taxes are necessary, but this one stinks. Higher property taxes for everyone across the board? Sure. Road tolls in one of the few majors cities in the world without any? Makes sense. Taxing people after they've spent almost all their money on a new home and will require more money to move, renovate, and update any deficiencies in the house? That's not exactly considered good timing.
The funny thing is, Rob Ford had made it part of his last campaign to remove the Toronto Land Transfer Tax. It was the one thing where we agreed, though certainly not enough to have me vote for him. And as it turns out, he did not even deliver on it. Why? No, it has nothing to do with crack, or drunken stupors, or being too busy with Jimmy Kimmel. He did not deliver because he had come to realize that the city needs the money the land transfer tax generates. It would be far too unpopular among his core supporters to suggest a different revenue stream like higher property taxes or road tolls. Ford was a cutter of spending, and he really didn't cut the land transfer tax as promised.
So, this next election he claims he would like to reduce the Toronto Land Transfer Tax by 5%. Not quite the same impact or scale of his last election promise.
Many candidates have not weighed in on this tax yet since the election will not take place until the Fall. Still, Karen Stintz says she wants to change how the land transfer tax works by having it apply at a higher amount to make the tax less of a burden. David Socknacki would like to tie it to the rate of inflation.
There are lots of ways to go about it. Reduce it, get rid of it, have a higher qualifying amount for first time buyer or have no one pay tax on a given amount, like the first $400,000.
The fact that changing the Toronto Land Transfer Tax has already shown up on the campaigns of those running for mayor suggests this is going to be an important issue for many of us in Toronto.