It’s a tax realtors have never stopped fighting in Toronto since it was introduced seven years ago, and now their worst fears may be coming true: The land transfer tax is spreading across Ontario.
The Ontario Real Estate Association (OREA) insisted Tuesday the governing Liberal party is going ahead with plans that will allow municipalities to follow Toronto’s lead and implement their own land transfer tax. Ontario government officials deny anything has been decided. The plans were revealed by the Toronto Sun Tuesday.
“We’ve certainly hoped it was not going to happen,” said Patricia Verge, president of OREA, about the tax rules being implemented province-wide. “But we’ve heard from the minister’s office that it is absolutely going to allow municipalities to add this to the bill.”
In the red-hot Greater Toronto Area market, a new tax threatens to tilt the map against suburbs that have been booming — in small part due to an economic advantage they have over the city because of the levy. Buyers in Toronto purchasing a $1 million home get slapped with a $32,200 tax to transfer property, $15,725 of which is the city of Toronto’s portion.
“I see people say I’m avoiding the double taxation by moving to York Region,” said Barry Cohen, a specialist in high-end real estate with Re/Max Realtron, referring to an area north of Toronto proper. He said there has been a spike in sales of homes worth $2 million or more in York Region — 90 properties sold in that price range over the first six months of the year versus 30 for the same period a year earlier.
Cohen said cash-strapped consumers who have been looking for better deals outside of the city may be chased away by the tax change. “No tax has been the icing on the cake (when buying outside Toronto),” he said. “But it will create a surge of buying before they implement the tax.”