Until April 1974, Ontario didn?t have a land transfer tax
Bill Johnston
REM
Until April 1974, Ontario didn’t have a land transfer tax. Then our (Conservative) government of the day gently introduced LTT to property buyers.
April 10, 1974:
- 0.3 per cent up to $35,000 and 0.6 per cent on the balance
- Average house price was $52,806
- Average LTT was $211.84
Five years later, it got worse.
April 11, 1979:
- 0.4 per cent up to $45,000, 0.8 per cent on the balance
- Average house price was $70,830
- Average LTT was $386.64
Seven years later, it got worse.
Jan. 1, 1986:
- 0.5 per cent up to $55,000, one per cent on the next $195,000 and 1.5 per cent on the balance
- Average house price was $138,925
- Average LTT was $1,114.25
Three and one-half years later, it got worse.
June 1, 1989:
- 0.5 per cent on the first $55,000, one per cent on the next $195,000, 1.5 per cent on the next $150,000 and two per cent on the balance
- Average house price was $273,698
- Average LTT was $2,580.47
Nineteen years later, it got far worse for Torontonians.
Spring 2008:
- In addition to the provincial LTT, Toronto home buyers were saddled with the Municipal LTT: 0.5 per cent on the first $55,000, one per cent on the next $345,000 and two per cent on the balance
- Average house price was $379,347
- Average LTT was $7,683.68
Nine years later, it got worse for some Torontonians.
March 2017:
- 2.5 per cent on the portion of purchase price over $2 million
Today, Toronto has by far the highest land transfer tax rates in Canada. Ball-parking the average home price today of $700,000, the average LTT is $20,200!
So, while average prices have gone up 1,325 per cent since 1974, LTT has gone up 9,528 per cent! That is seven times faster than house prices.
Keep in mind that home buyers get absolutely no benefit from paying the tax. It is simply a cash grab at a time when buyers typically are under the financial pressure that accompanies a move.
Remember too that buyers are paying the tax in after-income-tax dollars, as is the case with HST, and gas and liquor taxes.
Generally speaking, property taxes should be levied equally on the beneficiaries of municipal and provincial services. Land transfer tax is a windfall for the city and the provincial government with absolutely no benefit to the buyer who pays it.
© 2019 REM Real Estate Magazine