Land transfer taxes are charged based on the price of a home; the higher the price, the higher the tax. In the past, when home prices were lower, the provincial land transfer tax rebate essentially provided for a complete exemption for first-time buyers. However, from 1996 to 2010, the average price of a resale home in Ontario went up 120 per cent from $155,725 to $342,245. Specifically in the GTA, where average prices went from $198,150 to $431,463 over the same time period, homebuyers are at an even bigger tax disadvantage due to higher prices compared to the rest of the province. During the same period, the provincial government increased their Land Transfer Tax rebate by only $275 or 16 per cent. As a result, a first time home buyer today in Ontario pays $1,500 in LTT more than the previous generation on an average priced home after receiving the rebate; in the GTA, they pay $3,100 more in LTT.
REALTORS® are therefore urging all candidates running in the 2011 Ontario Election to support increasing the LTT rebate for first time home buyers from $2,000 to $3,500. This would return fairness to the LTT rebate program and allow present day first time home buyers to enjoy the same tax savings as buyers in previous years.
REALTORS® will continue to oppose land transfer taxes. We believe that no home buyer should have to pay these punitive taxes and will continue to work towards that objective.