It’s bad news for clients in Ontario – and one that could have a lasting effect on broker business – still the industry is bracing for an influx in business prior to a new tax being enacted.
The Liberal government is planning to permit all municipalities in Ontario to double the land transfer tax homebuyers pay.
“Whenever there is a policy change like that comes down we see an increase in applications prior to implementation,” Darren Robinson, a broker with Oriana Financial in Barrie, Ont., told MortgageBrokerNews.ca. “It could have a lasting impact in the long-run, though.”
However, at least one industry association is fighting against the province-wide policy change.
“This is an unfair, unsustainable and unpredictable tax," Patricia Verge, president of the Ontario Real Estate Association, told the Toronto Sun
Verge told the Sun
the proposed tax is a broken election promise, saying the Liberals told OREA during the provincial election last year that they had no plans to allow municipalities to charge an additional tax.
OREA has established a website – donttaxmydream.ca – in response. The page includes a petition that clients, brokers, and other industry players can sign.
According to OREA, the average land transfer tax a client pays on a $445,000 home is $5,375, but the new land transfer tax will add another $4,625 to that – totaling $10,000.
Currently, Toronto is the only city in Ontario permitted to double the tax. In that city, where prices continue to skyrocket, clients pay an average of $10,000-$15,000 on the average priced home. Still it hasn’t retarded home sales, say brokers.
In fact, an average of $300 million is raised per year in Toronto through the extra land transfer tax, which was put in place in 2008.