Up until April of 1974, Ontario didn’t have a significant land transfer tax. Then, our (Conservative) government of the day gently introduced LTT to property buyers.
April 10th, 1974: 0.3% up to $35,000.00, and 0.6% on the balance
Average house price was $52,806.00
Average LTT was $211.84.
Five years later, it got worse.
April 11th, 1979: 0.4% up to $45,000.00, 0.8% on the balance
Average house price was $70,830.00.
Average LTT was $386.64.
Seven years later, it got worse.
January 1st, 1986: 0.5% up to $55,000.00, 1.0% on the next $195,000.00 & 1.5% on the balance
Average house price was $138,925.00.
Average LTT was $1,114.25.
Three and a half years later, it got worse.
June 1st, 1989: 0.5% on the first $55,000.00, 1.0% on the next $195,000.00, 1.5% on the next $150,000.00, and 2.0% on the balance
Average house price was $273,698.00.
Average LTT was $2,580.47.
Nineteen years later, it got far worse for Torontonians.
Spring, 2008: In addition to the provincial LTT, Toronto home buyers were saddled with a Municipal LTT: 0.5% on the first $55,000.00, 1.0% on the next $345,000.00 and 2.0% on the balance.
Average house price was $379,347.00.
Average LTT was $7,683.68.
Nine years later, it got worse for some Torontonians.
March, 2017: 2.5% on the portion of purchase price over $2,000,000.00
Today, Toronto has by far the highest land transfer tax rates in Canada. Ball-parking the average home price today of $700,000.00,
The average LTT is $20,200.00!
So, while average prices have gone up 1,325% since 1974, LTT has gone up 9,528%!!! That is seven times faster than house prices!
Remember that home buyers get no benefit from paying the tax. It is simply a cash grab at a time when buyers typically are under the financial pressure that accompanies a move.
Remember, too, that buyers are paying the tax in after-income-tax dollars, as is the case with HST, gas and liquor taxes, etc.
Generally speaking, property taxes should be levied equally on the beneficiaries of municipal and provincial services. Land transfer tax is a windfall for the city and the provincial government with absolutely no benefit to the buyer who pays it.
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