TORONTO – It may soon get significantly more expensive to own a home in Ontario.
The province is currently in the process of holding public consultations to amend the Municipal Act which includes giving every municipality outside of Toronto the power to charge the Municipal Land Transfer Tax (MLTT).
Ontario has already given permission for Toronto to impose the tax back in 2008.
“It’s before us now as a consultation process to review the municipal act and that’s all this is, no decisions have been made,” said Finance Minister Charles Sousa.
“We’ve uploaded quite a bit with regards to the demands we put on municipalities.”
Sousa said the land transfer tax is part of the province’s review of the municipal act, which is set to be completed this week. He added that if the legislation is enacted it could come into effect by the spring of next year.
“We’re having a discussion with municipalities who have felt for some time a bit beleaguered on the fiscal front ever since the downloading days of the old government and we’re still recovering from that, we’re uploading costs,” said Municipal Affairs and Housing Minister Ted McMeekin.
“Should all municipalities have the same tools the city of Toronto has and if not, why not? So that’s part of the discussion we’re having.”
Those looking to purchase a home for $445,000 will therefore have to pay $5,375 in the Provincial Land Transfer Tax and an additional $4,625 for the new MLTT.
The Ontario Real Estate Association (OREA) issued a media release Tuesday decrying the province’s move to double the tax on home purchases.
“The Ontario Liberals wrote to us in May 2014, during the election, stating that ‘they had no plans to extend these powers to municipalities’,” said Patricia Verge, president of OREA.
“On behalf of home buyers, we want them to remain good on this election promise and that means Ontarians need to send a strong message that the government must rethink its plan to double the land transfer tax burden on home buyers.”
During question period at Queen’s Park on Tuesday, the Progressive Conservatives demanded the Liberal government to guarantee they won’t allow municipalities to impose the extra tax.
The Association claims the MLTT in Toronto has already stiffled home purchases in the city and is costing the economy billions of dollars.
“Over five years, it is estimated that 38,227 housing transactions did not occur in Toronto because of the MLTT,” the OREA said in a media release.
“With every home transaction generating $55,000 in consumer spending on things like renovations, furniture, appliances, and fees to professionals, the MLTT has cost the City of Toronto $2.3 billion in lost economic activity and 15,000 jobs.”
The OREA has since launched an online campaign to urge the public to oppose the move.
Kamal Aurora says she is buying a new home in Oakville, Ont., adding that she hopes to sell the home she currently has.
“Maybe I won’t be able to sell my house, that would affect me,” she said. “Homes are already getting expensive, it’s not a good decision.”
With files from Adam Miller