Wednesday, May 09, 2007

Concerned Residents Tell Mayor and City Council to Shelve Toronto

TORONTO, May 7, 2007 -- With the City of Toronto beginning its public consultations on potential new taxes, Toronto REALTORS® are hoping that Mayor Miller and City Council will heed their advice: don’t impose a home-buying tax.
Public meetings, which start today, are an opportunity for Toronto residents and businesses to tell the City what they think of various new taxes that are being considered. These proposals were only announced less than two months ago, and the City’s Executive
Committee could make decisions on them next month.
Possibly the biggest tax that could be levied by the City would be a second land transfer tax, paid by homebuyers on top of the existing provincial land transfer tax. A second land transfer tax of as little as 0.5 per cent would mean that average Toronto homebuyerswould have to come up with close to $2,000 extra when buying a home, a 45 per cent increase in the land transfer taxes that they already pay.
“We appreciate any opportunity to inform the City about how misguided a Toronto home-buying tax is, but this issue is too serious to wait for the City’s formal public meetings to start. As soon as REALTORS® found out about the proposed home-buying tax, they started
contacting the Mayor and City Councillors directly to tell them to shelve this crazy idea. Hundreds of REALTORS®, that we are aware of, have already sent emails to the Mayor and City Councillors,” said Dorothy Mason, President of the Toronto Real Estate Board (TREB).
“Not just REALTORS® have been speaking out against this tax. As soon as their clients, the general public, find out about this they are shocked that the City would even think about this. Many of them are letting TREB know about their concerns at the same time that they send them to the City, and from what we have seen, it’s clear that the public is very concerned about a Toronto home-buying tax,” said Mason.
The concerns that REALTORS® and the public have been expressing are numerous. Specifically, they have told the City that a homebuying tax would hurt homebuyers, home sellers, businesses, the economy, and the environment (Excerpts from REALTOR® and public correspondence provided below).
“A home-buying tax would hurt those who can least afford it the most. Many homebuyers already have to heavily finance their home purchase to be able to live in Toronto. If they have to find another $2,000, or more, for this tax, they’ll end up having less money for a down payment, which will mean a bigger mortgage, over $1,700 in extra mortgage interest, and possibly more mortgage insurance costs. For a homebuyer of an average Toronto property that could only afford a five per cent down payment, the Toronto home-buying tax could ultimately end up costing them over $11,000 in added costs when mortgage insurance and interest are considered,” said Mason.
“The unfortunate thing is that, at the end of the day, a Toronto home-buying tax could mean less, not more, revenue for the City because less demand for Toronto housing will mean less property assessment growth, which would mean less property tax revenue for the City,” added Mason.
Until recently, the City has only been allowed to levy property taxes.
“These are unprecedented decisions that the Mayor and City Council are making, so the last thing they should be doing is rushing, but that is exactly what they are doing. The City needs to make sure that it takes the time to fully understand the ramifications of a homebuying tax,” said Mason. For more info. click here.

Source: Toronto Real Estate Board

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