Monday, October 22, 2007

Toronto City Hall is a Joke

There should be a revolt (actually there already is) over the possibility of the most ridiculous City Council in the history of Toronto politics imposing a double land transfer tax on real estate sales.

With the average sale price of a home in the GTA being almost $400k, this tax will burden purchasers a further $4,475 on the purchase of their new home. As if Canadians weren't already the most taxed people on the planet. Along comes David Miller and his incredibly irresponsible council.

In a city that, on one hand, is allowing condos to be built on every empty square inch of land in its downtown core, that same city now chooses to discourage anyone from buying said condos. Anyone else see the irony.

So who really pays. The developers for one. Sales will slow. Units will be left on the market for far more time than need be. Unless, of course, the developers absorb the land transfer tax for the consumer. That being the case, the purchaser re-absorbs the cost anyway because the developer will simply raise the price of the units.

What incentive does this give our younger people struggling to put together their down payment to purchase a property now that they have to incur another $5,000 to $7,500 cost? My guess is that they will be looking in the suburbs for their first purchase. My conclusion is that the Council of the City of Toronto would prefer to have a bunch of elitists and lifestyle-of-the-rich-and-famous types living in Toronto.

An upfront tax sounds great on the surface. But, let's think long-term shall we. Think of the lost annual property taxes when less people want to live and/or buy in Toronto. Long-term taxes vs. a quick fix tax. Shame on you Toronto City Hall. Shame. Poor, poor planning...especially when 62% of Torontonians are against it.

I don't even want to tell you what the 44,000 realtors in Ontario think of the moronic implementation of this land transfer tax. The good people of Toronto might want to rethink this a bit more...I know they will next election.

6 comments:

Peter Loewen said...

I don't really see the irony. I do see the government taking advantage of an opportunity to increase its revenue.

I also see, pardon the pun, a good little bit of rent-seeking from realtors, so I won't cry too many tears over this.

James Curran said...

Why would YOU shed any tears Peter. You grew up in North Bay, you live in Montreal, the likelihood of you purchasing a property in TeeOh is negligent, and you obviously don't think 44000 realtors aren't a powerful lobbying entity.

Peter Loewen said...

Jim,

I think odds are even I end up in Toronto. Second, I am sure you guys are a powerful lobby. That's why I called you rent-seekers.

Peter

lance said...

"Toronto Mayor David Miller and his allies say this week's provincial election results send the message that city residents are willing to pay higher taxes." - CBC

Cheers,
lance

Cam said...

Definitely a bad idea. An economics professor of mine at the University of Toronto, Gilles Duranton, and a colleague of his wrote about the potential fallout from such a badly thought out policy. Check it out, it's a short read.

http://www.thestar.com/comment/article/259654

gtarentals said...

Totally agree. It seems to be designed to slow real estate transactions, which have a huge multiplier effect in the city and surrounding areas. This is Toronto, very conservative. Making sure we don't have a housing bubble.