Who will be the next Municipality to Adopt a Municipal Land Transfer Tax?

As many of us know, Toronto--authorized by the Ontario Government--has approved a Land Transfer Tax that mirrors Ontario's Land Transfer Tax.

This new tax for buying a home in Toronto doubles the amount of tax a buyer has to pay on closing.

On an average price in Toronto of $387,000, Ontario's Land Transfer Tax amounts to $4,275. With the new Municipal tax this amount doubles to a whopping $8,550.

So what does this have to do with us in Niagara? Plenty

  1. Other municipalities will lobby the provincial government to amend the current Municipal Act to give them the same taxing authority. They are notorious for this practice.
  2. Home buyers will be asked to fund services that all taxpayers benefit from, a discriminatory practice.
  3. Home buyers will have to reduce their down payment to pay this tax, which will cause them to pay higher mortgage insurance premiums and additional mortgage interest.
  4. Some home buyers would be forced out of the marketplace which negatively affects sellers.
  5. The tax represents significant amounts of money at a time most people can least afford it, given other purchase demands.
  6. "According to a study conducted by Clayton Research for the Canadian Real Estate Association, each re-sale housing transaction in Ontario generates approximately $27,000 in spin-off spending for things like furniture, appliances, renovations, etc."  Re-sale real estate sales have contributed billions per year to our economy. A 2nd land transfer tax will impact our economy negatively.

The necessary costs of buying a home already add up to a significant amount. There are:

  • Pre-closing costs, such as Mortgage Application Fees, Appraisal or Mortgage Insurance Fees & Inspection Fees.
  • Closing costs, such as Legal Fees and Disbursements, Title Insurance and Closing Adjustments.

All are essential costs to protect a buyer's interests and confirm the ability to buy.

  • Over and above these costs, a buyer pays Ontario Land Transfer Tax. The Average Price in the Niagara Region, now around $208,000, triggers a tax of $1,805.

If the Region or Niagara Municipalities demand and receive similar authority, then mirror the Ontario tax formula, a home buyer will pay $3,610, based on the average current price today. 

We are all home buyers at some point. Do we want to be victimized by a 2nd buying tax?
I would welcome your comments.

 

Brenda Piech

Brenda Piech

Sales Representative
CENTURY 21 Today Realty Ltd., Brokerage*
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