TORONTO, February 2, 2015 -- The Toronto Real Estate Board (TREB) will be making a deputation to the City of Toronto’s Budget Committee today, as part of the City’s Budget consultations. TREB will be recommending adjustments to tax policy that could help City Council address the City’s affordable housing challenges, an issue that Mayor Tory has made a priority.
“The Toronto Real Estate Board applauds Mayor Tory for making the City’s housing needs a priority. Few issues are more important,” said Paul Etherington, TREB President. “REALTORS® agree that housing must be a priority for Council. In particular, we believe that the City can play a critical role in helping Torontonians to achieve home ownership, and that ownership housing can, and does, help the City achieve its affordable housing goals”.
TREB will be pointing out that City assistance can help people to purchase a home, which in turn can help alleviate pressure on the City’s social housing wait list. In fact, a survey released by the City’s Affordable Housing Office, in 2012, found that 14% of people who achieved home ownership, with assistance from the City, were either previously living in Toronto Community Housing or on the social housing wait list. By helping these people to become homeowners, the City freed up Toronto Community Housing and took pressure off the wait list. With this in mind, TREB will be telling the City’s Budget Committee that the City can help more people like this to become homeowners by correcting current Land Transfer Tax policy inequities, which hurt those who can least afford it, such as first-time buyers.
“TREB continues to believe that the Land Transfer Tax should be phased out entirely. Nevertheless, we are focusing our current recommendations on actions that we believe are realistic and that can, and should, be taken starting with the City’s 2015 budget,” said Etherington.
TREB will be making two recommendations to the City’s Budget Committee, to address inequities caused by neglecting to adjust the Land Transfer Tax for inflation since it was implemented in 2008. TREB’s first recommendation is to increase the maximum allowed rebate for first-time buyers.
“As a result of rising house prices since the Land Transfer Tax was implemented, the average LTT paid to the City has increased by a whopping 102%, but the maximum allowed rebate for first-time buyers has been left unchanged, significantly reducing the actual benefit to first-time buyers. Under the current structure, even a first-time buyer purchasing a below average priced home would NOT be exempt from land transfer tax and be forced to pay thousands of dollars to the City,” said Von Palmer, TREB’s Chief Government and Public Affairs Officer.
TREB’s second recommendation is that the LTT’s tax rate thresholds be adjusted upward to account for inflation since this tax was implemented seven years ago.
“Currently, the highest LTT rate of 2% kicks in on homes priced at or above $400,000, which was the average home price when this tax was first implemented in 2008, but is significantly below the current average Toronto home price, which was $610,000 in 2014. This means that even purchasers of below average priced homes are currently being forced to pay the highest LTT rate,” said Palmer.
TREB believes that affordable housing is a critical issue for the City of Toronto.
“ We believe that the two adjustments to the Land Transfer Tax that we are recommending could significantly help more people to become home owners and help the City to achieve its affordable housing goals,” said Von Palmer, TREB’s Chief Government and Public Affairs Officer