First-time investors and home buyers in Toronto could benefit if a recommendation to the city’s Budget Committee is implemented.
The Toronto Real Estate Board (TREB) has recommended that the Land Transfer Tax (LTT) first-time buyer rebate maximum and the LTT tax rebate thresholds are adjusted upwards for inflation.
“This rebate has not been adjusted for inflation since this tax was first implemented,” wrote John Lusink, chair of TREB’s government relations committee, in a letter to the Budget Committee.
“Since that time, because of rising house prices, the average LTT paid to the City has increased by a whopping 102 per cent, but the maximum allowed rebate for first-time buyers has been left unchanged. Under the current structure, even a first-time buyer purchasing a below average priced home would not be exempt from Land Transfer Tax.”
“Since the average price of Toronto homes has gone up significantly since the land transfer rebate was introduced in 2008, it only makes sense that the rebate made available should go up as well.
“Toronto home buyers are getting hit hard with the double Land Transfer Tax and many first-time buyers are being pushed out of the market by these taxes,” he continued.
“With average Toronto home prices up to $610,000 in 2014 from $400,000 in 2008, the government should adjust the tax rate thresholds to account for inflation. At their existing thresholds most buyers are being forced to pay the maximum LTT.”