31 Oct Land transfer tax could double across ontario
Prospective buyers across Ontario may soon have to stretch their budgets by a few extra thousand dollars.
The news comes ahead of recent concerns made by OREA that the governing Liberal Party will allow municipalities to tack on an additional city-level land transfer tax on top of provincial taxes already in place.
As of now, only homebuyers in the City of Toronto have to pay both provincial and municipal land transfer taxes.
The move to allow Toronto to impose its own land-transfer tax effectively doubled tax costs for homebuyers in the city when it was first introduced seven years ago.
In a study conducted by Atlus Group on the implecations of MLTT, It was noted that based on the historical MLS® data and the C.D. Howe study, an estimated 38,278 potential resale transactions were lost between 2008 and 2013 due to the implementation of the MLTT in the City of Toronto, which has had significant negative economic implications for the city.
Currently, taxes stand at as much as $12,200 for a $500,000 property in Toronto. If no municipal tax was pushed for, costs would sit at nearly half that figure at $6,475 for a similarly priced home. Although it’s worth noting, first time buyers in Toronto who make a real estate purchase under the $400,000s are exempt from the municipal portion of the tax.
Currently, provincial land transfer rates sits at around 1.5% of a home’s value for properties between $250,000 to $400,000 and 2% for those priced above the $400,000s.
If the Ontario Liberals follow through with this plan, home buyers will be forced to pay $10,000 in total land transfer taxes on the average priced home in Ontario, starting as early as next year.
Does the prospect of a possible tax hike in the near future have you considering buying now rather than later? If you have any other questions regarding Municipal LTT, want to invest in pre-construction condos or would like some information about the toronto, brampton or mississauga real estate market, you can trust me as your real estate expert. FEEL FREE TO CONTACT ME AT 416 414 8888 OR firstname.lastname@example.org