T.O. buyers will be hit up for thousands in fall
I think it’s safe to say the dog days of summer have officially begun. During the next month and a half, before school begins again in September, Toronto’s real estate market is expected to see the most activity it has all year. If this theory holds true, it should be a real scorcher of an August. May recently went into the books as the best single month in terms of sales ever, and this June went down as the best June ever, up 20 per cent from last year.
Is the future for real estate in the GTA really as bright as it appears to be? Every fairy tale has its villain, and it seems we’ve found one. In our story, the dragon comes in the form of a government proposed legislation that would increase Toronto’s land-transfer tax by 100 per cent.
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Currently, every homebuyer in Ontario pays land-transfer tax when buying a home. The formula for calculating what you owe depends on the price of the property. If your purchase price is $300,000, your land-transfer tax amounts to $2,975. A $350,000 price works out to $3,725; $400,000 – $4,475, and $450,000 comes to $5,475, to give you a range. If the additional land-transfer tax law passes, you can take these figures and double them. This means your modestly priced $300,000 will carry a $6,000 tax.
Needless to say the city of Toronto would not be attempting such a bold move if it didn’t feel the real estate market could stand up to the punch. You have to credit the dragon for waiting until the most opportune time to attack — in this case, when confidence in the market is at an all-time high and opposition will be lower than normal.
This homebuying tax will affect the city of Toronto — the 905 region will not be affected. The greatest activity has been in the downtown condo market because first-time homebuyers (young professionals, those just starting out) recognize that buying a condo is their most practical, intelligent and, in most cases, only option.
This land-transfer tax would hurt those who can least afford it the most. Imagine if Sarah from down the street could no longer afford the down payment she was planning because of this additional expense.
Also consider no other Canadian city suffers from two homebuying taxes. This additional tax would give Toronto the highest such tax in Canada and second highest in all of North America.
If this makes you as upset as it does does Sara, I’m asking you to stand up against this dragon.
You can visit www.nohomebuyingtax.comto voice your concerns and learn more. Our cities’ residents have worked very hard to enjoy the economic security of our marketplace and the wonderful investment options that our real estate offers.
If anything, Torontonians should be thanked and rewarded.
If this legislation passes, instead, we will all be punished.
Feel free to e-mail Amit at email@example.com all your real-estate questions and/or comments.