The provincial move to allow individual municipalities to impose land transfer taxes is drawing organized opposition from MPPs and the Ontario Real Estate Association – but one Toronto broker is providing some perspective on what it will mean to the Ontario market.
“Initially when Toronto launched their own land transfer tax, everyone ran out to buy that house to try and beat the deadline. It was a gold rush,” says Frances Hinojosa, an agent and regional partner forDominion Lending Centres in Toronto, Ont. “Then housing sales went down 16% after the deadline. But then it rebounded, and became part of the transaction – people accepted it.”
Leeds-Grenville MPP Steve Clark introduced a motion Tuesday asking MPPs to vote on the following: “In the opinion of this House, the Government of Ontario should not impose, or help municipalities facilitate the imposition of any new municipal land transfer taxes (MLTT).”
An Ipsos Reid poll shows that the overwhelming majority of Ontarians (89%) outside of Toronto oppose a new municipal land transfer tax charged on home purchases in their area. Respondents agreed that if a new land transfer tax were put in place, it would limit their ability to afford a home (77%) and they would likely have to delay a purchase (75%). Ontarians agreed (77%) that the government should do all it can to help families own their own home.
While people may be second-guessing their purchases if municipalities that do institute their own land transfer tax, at the end of the day, it will be an opportunity for the broker to sit down with the client and discuss the costs associated with buying the house.
“It is the cost of buying a house,” Hinojosa told MBN, “and I’ve said time and again that people don’t sit down and consider the total cost of buying a house. It is not just the rate at the end of the day – such as the closing costs, and how they are going to affect you, and if you can afford the additional costs.”
When the announcement was first made back in October,Ron Butler of Verico Butler Mortgage commented that no matter how “unacceptable” we think new taxes and fees are; “the government could care less what we think.”
On December 3, MPPs from all three parties will have the chance to vote on this motion and let their constituents know whether they personally support or oppose higher taxes on home buyers. The motion is to be debated and voted upon during Private Member’s Business, where MPPs are permitted to speak and vote free of party influences. This means that the vote will be a true reflection of individual MPPs’ leaning, not that of their party.
“MPPs have a chance to represent the will and interests of their constituents and oppose this unfair tax,” said Patricia Verge, president of OREA. “We’re calling on Ontarians to let their MPPs know home buyers are stretched and already pay enough tax by going towww.DontTaxMyDream.ca.”
The motion is in response to revelations that the Ontario government wants to give all municipalities the ability to charge a second land transfer tax on the purchase of a home. If the municipal land transfer tax were to spread province-wide, Ontario would have the distinction of being the most taxed jurisdiction in North America when it comes to buying a home.
“Ontario home buyers are already charged a provincial land transfer tax, so by adding a municipal tax, they would essentially be doubling the tax burden on Ontario families,” said Verge. “If the Ontario Liberals follow through with this plan, home buyers will be forced to pay $10,000 in total land transfer taxes on the average priced home, starting as early as next year.”
“Ontario Liberals promised voters in the last election that they had ‘no plan’ to introduce the second land transfer tax they are now looking to impose on home buyers,” Verge concluded. “On behalf of Ontario families, we urge them to keep their promise and help protect affordable home ownership for future generations.”