New single-family home buyers pay higher taxes
Steve Randall
Mortgage Broker News
Buyers of newly constructed homes in the Greater Toronto Area pay some of the highest government charges in North America according to a new study.
The analysis of taxes, fees, and other government charges across several North American metros shows that buyers of new single-family homes in the GTA pay on average $222,000 in fees with high-rise apartment buyers paying $124,000.
The Altus Group report for the Building Industry and Land Development Association (BILD) examined major Canadian cities such as Ottawa, Vancouver, Montreal and Calgary, major US metropolitan areas such as San Francisco, Miami, Boston, New York City, Chicago and Houston, and compared them to various GTA municipalities. The overall tax burden was used as taxation is handled differently by each municipality.
“The facts demonstrate that government fees, taxes and charges play a significant role in eroding housing affordability in the GTA,” said Dave Wilkes, President and CEO of BILD. “These costs are unsustainable and BILD calls on all governments to bring certainty and transparency for new home buyers,” continued Wilkes.
Three times higher The study found that the average total of all government fees for a typical single-family home in the GTA is 3 times higher on a per unit basis than in the 6 US metros – and almost double that in the other Canadian urban areas included.
For high-rise apartments, fees are 1.5 times higher than the US metros and around 30% higher than the Canadian cities.
And while other Canadian cities are roughly in line with US counterparts for the government costs incurred by developers, in the GTA they are double for low-rise and 60% higher for high-rise on average compared to other Canadian jurisdictions.
“The Building Industry and Land Development Association supports the concept that growth should pay for growth,” said Wilkes. “But clearly the costs associated with building a sewer or adding a sidewalk cannot be that much different in Montreal, Ottawa or Calgary. GTA municipalities should not be adding disproportionate costs on new home buyers as a mechanism to keep property taxes low, especially when the infrastructure benefits all,” added Wilkes.
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