Toronto's own 'Luxury Home Tax' is looming...
Monday Oct 09th, 2023
In 1974, the Provincial Government began to charge us an Ontario Land Transfer Tax (LTT) when we bought a property – residential or commercial. In February, 2008, the City of Toronto decided to add on its own Municipal LTT. For example, without getting into the intricate calculations, the Ontario LTT on a $1,000,000 purchase is $16,475. The Toronto LTT is also $16,475. Together, that’s an additional $32,950.00 a buyer must pay on top of the purchase price.
As she 'promised' in her campaign, Mayor Olivia Chow presented, and Toronto city council voted, to bring in a new surtax on high-value home sales. And last week they adopted the 'new' graduated rate on the Municipal Land Transfer Tax for homes valued at $3 million and above.
What does a new ‘graduated land transfer rate’ look like for homes exceeding $3 million?
- a 3.5 per cent tax would be applied to homes valued at more than $3 million up to $4 million.
- a 4.5 per cent tax would be applied to homes valued at more than $4 million up to $5 million,
- a 5.5 per cent tax to homes valued at more than $5 million up to $10 million,
- a 6.5 per cent tax to homes valued at more than $10 million up to $20 million, and
- a 7.5 per cent tax would be applied to homes valued at more than $20 million.
And we don’t know yet if this new tax is only on the delta amount BETWEEN $3M and $4M or is it on the whole purchase price? Lucky us, we’re being kept in the dark on that one.
City staff were also directed to report back to Council ahead of 2024 budget talks about several other possible revenue tools, including a tax on non-residential parking spaces and on foreign home buyers.
As well, Council voted to add a Toronto sales tax to the current HST, and lifted a $5-per-hour cap for on-street parking. Council also requested reports on introducing a foreign buyer land transfer tax, an emissions performance charge for buildings and an additional land transfer tax on buyers of residential property where the purchaser owns more than one property within Toronto, with some appropriate exemptions.
I appreciate Toronto needs new financial tools to be able to provide the services and investment essential to support our growth. However, in my humble opinion, it's an unjust and uneven burden in a city where the average price for a totally livable detached home is nearing $2M dollars and beyond.