Six months of COVID-19 insanity and the average price in Toronto is still around $1.5 million
As one of Canada’s most desirable housing destinations, Toronto’s home prices remain at the mercy of multiple factors despite the considerable impact of the COVID-19 pandemic.
Land transfer taxes and fees – which the Canadian Taxpayers Federation recently tagged as among the most onerous consumer-side burdens – represent an additional $54,000 to every detached residence sold in Toronto, according to an estimate by The Financial Post.
Development charges and property taxes add a further $150,000 per transaction, along with thousands of dollars more annually, according to blogTO.
“One reason in particular for our high Land Transfer Tax and Development Charges is that provincial legislation restricts how the City of Toronto can generate cash flow,” real estate representative Steve Fudge told blogTo. “Unlike many North American cities, Toronto cannot add a surtax on income, or a sales tax on products (like gasoline), or tax education or health care facilities. Yet.”
Another driver of elevated home prices is the baby boomer cohort, a generation that was fortunate enough to have been able to invest in Toronto homes back when prices were nowhere near their current dizzying heights.
Data from Altus Group indicated that single-family homes, which account for a significant portion of available housing in Toronto, are still “the preferred living option” of 71% of homeowners in the 65-74 age range.
And while foreign presencehas substantially decelerated in the last few months due to the coronavirus outbreak, Toronto has seen its prices almost triple from 2000 to 2017, with foreign investment and purchases being a leading driver of this rise.