Ontario’s provincial election is slated for June 7, and TREB is pushing the housing agenda
The Toronto Real Estate Board has been one of the land transfer tax’s most vocal critics, and a new poll it sponsored indicates most Greater Toronto Area residents are too.
According to a TREB-sponsored Ipsos Reid survey, 77% of GTA resident respondents favoured rolling the tax back, while 68% supported a full repeal. Sixty-nine percent of respondents said housing affordability will influence how they vote in tomorrow’s provincial election.
Perhaps not surprisingly, then, the survey was released just days ahead of the election.
“It’s a question of affordability,” said Von Palmer, TREB’s chief communications and government affairs officer and its chief privacy officer. “One thing everyone agrees on is government intervention in the housing market, and specifically how regulation and taxation are making housing more and more difficult from an affordability point of view—and that’s strictly when you look at the role the government has played, not the laws of supply and demand. The question is: Is government doing anything to assist people getting into the housing market, or are its measures in place a deterrent?”
While Palmer concedes an argument can be made that the Office of the Superintendent of Financial Institution’s latest B-20 guidelines were beyond the government’s control, he isn’t so sparing in his assessment of other initiatives for which it was the catalyst.
“I get that—that’s OSFI—and the interest rates are the central bank, but there are fiscal policy tools, like the land transfer tax, in which the government has a very direct role,” said Palmer, adding that the government also introduced the Fair Housing Plan. “With property taxes, you pay a certain amount every year, but the land transfer tax is paid every time people move, and families move an average of three or four times in a lifetime.”
According to the C.D. Howe Institute, there are 16% fewer sales every year in Toronto than there would have been without the land transfer tax. Palmer says that the municipal and provincial land transfer taxes [for homes valued between $400,000 and $2mln] in Toronto amount to $30,000 on the average priced home in the city.
Wholly unnecessary, says Mortgages of Canada founder and CEO Samantha Brookes.
“A double land transfer tax isn’t necessary,” she said. “There are many other ways to increase revenues without touching housing. Right now the housing market is adjusting and any further increases by adding taxes would stagnate the market further.”
Toronto’s city budget has become very dependent on the municipal land transfer tax. But, as the TREB numbers indicate, the burden it puts on the housing market, especially with recent intervention, might be too much to bear.
“In 2018, there have been fewer buyers than in 2017, and the recent TREB numbers validate this information,” said Brookes. “At Mortgages of Canada, we have taken our focus off buyers as the qualifying requirements have made it difficult for first time buyers to afford a home.”