Land Transfer Tax Archives - Distinctive Advisors Inc.

Distinctive Advisors Inc.

Menu

Distinctive Real Estate Advisors Inc., Brokerage | Distinctive Real Estate Advisors Inc., Mortgage Broker License #12592

Tag Archives: Land Transfer Tax

City of Toronto to Increase to Land Transfer Tax — Effective March 1, 2017

On February 15, 2017 the City of Toronto Council approved changes to the Toronto Land Transfer Tax that mean additional Land Transfer Tax (LTT) costs for some home buyers with a closing date on or after March 1, 2017.

The changes are:

  • Added an additional LTT of 0.5% of the value of a residential or non-residential property from $250,000 to $400,000 (an additional $750)
  • Added an additional LTT of 0.5% of the value of a residential property above $2 million
  • Added an additional LTT of 0.5% of the value above $400,000 of a non-residential property
  • Increasing the maximum allowed First-Time Home Buyer Rebate to $4,475, up from $3,725
  • Amended the first-time home buyer rebate program eligibility rules to restrict rebate eligibility to Canadian citizens or permanent residents of Canada

TREB Efforts Achieved Significant Concessions — First-Time Buyers Protected

Toronto Real Estate Board (TREB) undertook a comprehensive campaign to oppose the proposed changes. As a result of these efforts, significant concessions were made to the proposals that went forward for City Council’s consideration as follows:

  • Under the original proposal, first-time buyers would have been forced to pay an additional $475 in Toronto LTT. However, TREB pushed for an increase in the rebate from $3,725 to $4,475, meaning first-time buyers will not face an increase.
  • Many first-time buyers would have lost eligibility for the first-time buyer rebate entirely, meaning a total LTT increase of $4,475. TREB pushed back and all first-time buyers will be eligible for a rebate.
  • As a result of TREB’s efforts, first-time home buyers will NOT see any change.

Do you have the full picture of how municipal and provincial land transfer tax impacts Toronto real estate? Click here to view the breakdown of land transfer tax for Toronto homeowners.

Toronto Land Transfer Tax — What’s New and What’s Coming?

Provincial (Ontario) Land Transfer Tax Changes – 2017

2016 was a big year for changes in the Canadian Real Estate Market. On the heels of the announcement in October regarding changes in the mortgage underwriting rules for first time home buyers (ultimately reducing the buying power of first-time home buyers in Canada, read more here), the province announced changes to provincial land transfer tax which are aimed at helping increase affordability for first time home buyers, effective January 1, 2017.

Here are the changes:

Ultimately these changes are expected to have negative implications on transactions over $2 Million which, in the City of Toronto, represents a large part of the real estate market for centrally-located detached homes.

But Toronto is unique in that, unlike all other municipalities in Ontario, it has a municipal land transfer tax in addition to the provincial land transfer tax.

City of Toronto Municipal Land Transfer Tax – Proposed Changes

The City of Toronto is currently exploring raising the Municipal Land Transfer Tax in order to meet 2017 budget objectives. The effect would be an additional 0.5 per cent of tax on all buyers.

This could mean a seven per cent increase of $750 on top of the $11,000 for an average priced home purchased by a repeat buyer in Toronto.

Tim Hudak, CEO-designate of the Ontario Real Estate Association (OREA) said that if the city increases the municipal land transfer tax, it would effectively be “clawing back” the additional rebate offered by the province. Hudak says, “Unfortunately, Toronto is proposing to swipe up to 25 per cent of the provincial savings out of the pockets of young couples and put it into city coffers instead.”

Toronto Real Estate Board has launched a website to combat the City on the increase of land transfer tax.

Toronto City Council will finalize its budget in February 2017.

Would you like to be kept informed on the latest in Toronto Real Estate? Contact a member of our team to be kept in the loop or sign up for our monthly real estate updates today.