TREB accuses the land transfer tax of pushing buyers to the ’burbs
According to the Toronto Real Estate Board, Torontonians are so horrified by the land transfer tax that they’re running for the suburbs. The context: home sales and values are way, way up in the suburbs, while sales and values in the city are, well, also up, but less so. The TREB believes the land transfer tax is to blame (although Richard Silver, president of the board, admitted cheaper homes might also have something to do with it) and cites a recent poll that said 75 per cent of would-be buyers in Toronto and the 905 regions say they’re more likely to buy outside the city because of the tax as proof that it is pushing homebuyers away. However, that 75 per cent includes people who already live in the ‘burbs or wanted to move there anyway—we’d say the numbers suggest there’s some opposition to the tax, but don’t quite confirm a mass exodus of disgruntled house-hunters. [Financial Post]
What nonsense.
If the TO based realtors were genuinely concerned about this they would lower their egregious commissions.
Self serving research and nothing else.
The LTT is an excellant revenue source for the City of Toronto. We enacted this tax, thanks to provincial support, to provide the city with an opportunity to diversity our revenue sources. The councillors who voted to kill the VRT seem to have forgotten our purpose in introducing these new sources.
When Council voted for the LTT we asked the Province of Ontario to vacate the playing field by abandoning their LTT, which one could argue is a tax by the province that they do not have justification in levying.
Since first time home buyers are exempt from the City’s LTT, it is the frequent home buyer, the house flipper and speculator that feels aggrieved by the City’s LTT.
It has been my experience that some realtors in Toronto are inordinately, actively involved in multiple house buying for personal purposes. No wonder the whining comes from their organization.
Why wouldn’t the City take the opportunity to capture a portion of that business?
Lower the realtor’s commission rate.
I personally know of many people (our family included), who cannot afford to sell and move up in Toronto. The tax put us over the edge. The LTT is a regressive tax. The only exemptions, by the way, are for houses under $400,000. How many of those can you find in the city core? First time buyers are only exempt in some circumstances as respects the provincial LTT, not the municipal. Why don’t we just have a municipal sales tax? That would capture revenue from everyone who spends money in Toronto? It’s punitive and opportunistic for the government to target homebuyers.
Real Estate commissions have been a part of the transaction since the recording of sales, as a matter of fact, commissions are lower now than prior. The city LTT has only been around a few years. I have been a realtor for 25 years and in the first 20+ of those years I have never had any sales to the suburbs. Since the invention of the new LTT, I have made several trips to the burbs with clients in tow for the purpose of avoiding the LTT and have made many sales outside the LTT zone as a result. Be prepared to use some of the new found revenue to solve new problems created by charging that tax, like urban sprawl. It is a typical short term fix for long term pain. We should be building up, not out.
What utter nonsense. Toronto has lower property taxes than the 905. Further bidding wars increased prices due to the encouragement of the real estate industry, especially TREB, to increase their own commissions. If the correlation mentioned in the story was true, instead of prices going up every year by about 5% since the introduction of the LTT in Feb., 2008, there should have been a reduction.
If you cannot afford to pay an extra $5200 of LTT (or about 1% more) on a 500K home, then you cannot afford to pay that much for any home in Toronto. However, if you live in the burbs and work in Toronto, your travelling costs and less sleep will never outweigh the costs of the LTT.
The real estate industry in doing the same thing they did back in the late 80’s. They know that a correction, which must be at least 30-50% of current prices is long overdue. TREB is a greedy, disengenous organization that should be disbanded since they add to the misery of the average person with their actions.