Is Ontario really helping first-time homebuyers or it is another Liberal cash grab?
On November 14, 2016, the Government of Ontario announced that it would help more people purchase their first home through a proposal to double the maximum Land Transfer Tax (LTT) refund for eligible first-time homebuyers to $4,000. The increase would be effective January 1, 2017 and mean that eligible homebuyers in Ontario would pay no Land Transfer Tax on the first $368,000 of the cost of their first home. Sounds good isn't it?!
But Ontario is increasing the same tax on homes that sell for over $2 million! The government says half of first-time buyers won't pay any land-transfer tax to the province, while the half-percentage point increase on homes over $2 million will affect less than one per cent of the population.
However, proposed changes to the Land Transfer Tax in Toronto have been criticized by the Toronto Real Estate Board (TREB) for their impact on first-time buyers.
The proposals will be put to the City of Toronto’s Executive Committee this week but TREB’s president, Larry Cerqua, says they would be in contrast to the recent narrative of the city’s housing problems.
“The proposed changes to the City of Toronto’s Land Transfer Tax are a cash grab, and would make all Toronto home buyers pay more Toronto Land Transfer Tax, which means that the City is proposing to make home ownership in Toronto even more expensive,” Cerqua warned.
TREB’s figures show that buyers of an average priced home in Toronto pay $11,000 in LTT currently, but the proposed changes would add 7 per cent ($750) to the cost with first-time buyers paying an extra 4 per cent ($425) after a proposed increase to the rebate for new buyers.
City Hall should be focused on making home ownership in this great City more affordable, not less; and should be relying less on this tax, not more,” said Von Palmer, Chief Communications and Government Affairs Officer at TREB. “TREB will be participating in the City’s upcoming budget consultations and will be raising concerns with these proposals if they move forward.”
Are you looking to buy a property? If you like, I can tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much I could save you right now if you have an existing mortgage.
Until next time,
Your mortgage expert Evgeny Kamenskiy