LTT Major Part of Budget Debate
While TREB’s efforts succeeded in making action on the Land Transfer Tax a major and central part of City Council’s 2014 budgetary debate, unfortunately, City Council chose not to proceed with a cut in the Land Transfer Tax with the 2014 budget. Nevertheless, TREB’s efforts made significant accomplishments, which moved this issue forward in a very significant way and are cause for optimism on this issue in the year ahead during the upcoming municipal election campaign.
Important Accomplishments Made
As our industry has demonstrated through most of our government relations achievements, success requires patience and is usually the result of many years of work, advancing our issue incrementally one step at a time. In this respect, TREB’s recent efforts on the Land Transfer Tax moved this issue forward substantially.
Furthermore, while a LTT cut was not achieved with the 2014 City Budget, it is imperative to note that, by creating a high profile debate focused on the need for an LTT cut, TREB’s efforts helped to ensure that Toronto LTT rates were NOT INCREASED, that the first-time home buyer Toronto LTT rebate was maintained, and that other GTA municipalities are aware of political and public opposition to this taxation approach, helping to prevent the spread of municipal land transfer taxes throughout the GTA. In addition, these efforts helped to ensure that the Land Transfer Tax will be a major issue in the upcoming municipal election.
A detailed update is provided below:
Two motions related to cutting the Toronto Land Transfer Tax were tabled at the City Council meeting:
- The first was for a five percent cut in the Land Transfer Tax for 2014. This was not approved by Council, likely because the motion called for the reduced LTT revenue to be off-set by eliminating service enhancements included in the proposed budget. Under current political circumstances, it was unlikely that Council would agree to any approach affecting services.
- A second motion asked for staff to report on options for a future five percent cut. This motion was only VERY NARROWLY defeated, which indicates that there is a substantial portion of the current council willing to consider a cut to the LTT, if done so without affecting service levels. The substantial support that this motion received means that TREB’s efforts have made this issue a priority for many councillors.
TREB efforts resulted in the following:
- LTT cut was a major part of the debate and discussion throughout the City’s budget process. Attention for issues during the City’s budget process is extremely competitive.
- There were serious motions tabled consistent with TREB’s positions. Given the competitiveness of the budget process, this is, again, noteworthy.
- LTT rates were not increased. Various councillors attempted to use the LTT surplus to fund other programs. Without TREB’s pushback, it is very possible that Councillors would have also been discussing increasing LTT rates.
- The rebate for first-time home buyers was maintained. Various councillors discussed the possibility of eliminating this rebate. Again, TREB’s push back helped to prevent this.
- TREB’s efforts helped to make the LTT a central and high profile part of the Budget debate, which sends a strong message to other municipalities that this is a controversial issue, thereby reducing their willingness to implement a municipal LTT in their municipalities.
- TREB’s efforts helped to ensure that the LTT remains a high profile issue, and thereby ensures that this will be a major issue discussed during the upcoming municipal election campaign. TREB’s GRC is meeting with major mayoral candidates to encourage them to include real estate friendly issues, including Land Transfer Tax relief, within their platforms. We are optimistic in this regard.
Along with efforts to continue to move this issue forward during the upcoming municipal election campaign, TREB’s GRC is focused on numerous other key issues over coming months including Bill 55 (multiple offers), REBBA insurance (provincial consultation), regulation of home inspectors (on-going provincial review), and the review of the Condominium Act, among others.