#WednesdaysatHomeLove – Homes Not Hurdles Outcome
“Hamilton not pursuing unpopular land transfer tax idea”
“Residents and real estate professionals raised the alarm about the potential new tax ahead of a city meeting.
It turns out even the theoretical idea of a new tax is enough to attract an angry crowd to Hamilton City Hall.
Last year, council asked for a report on potential ‘revenue tools’ — specifically, options other than property tax hikes — to help the cash-strapped city with increasingly dire budget pressures.
The resulting report, which went to councillors Wednesday, gave information on three different tax scenarios: special parking levies, alcohol and cigarette taxes and a local version of a land transfer tax that staff suggest could ‘reduce dependency on property taxes’
There were no recommendations in the report, no councillor pitched a motion to consider new taxes and none could be adopted unless the province changes existing laws.
But that didn’t stop dozens of real estate industry workers and homeowners from packing council chambers Wednesday carrying signs declaring ‘No to a municipal land transfer tax’ and “Homes not hurdles.” The idea circulated far and wide online ahead of the meeting and some councillors reported being inundated with emails.
The province already applies a one-time land transfer tax to the sale of each home as part of closing fees, with the amount based on the purchase price.
Toronto is the only city in Ontario currently allowed to apply a second, municipal land transfer charge. Hamilton’s report suggests a local version of that tax could yield close to $117 million a year — which, in theory, could allow for property tax cuts.
Just the idea of exploring such a new land transfer tax spurred an uproar among builders and realtors, however.
A local land transfer tax would be ‘counterproductive’ to the goal of making housing more affordable — and push more home-seekers away from Hamilton, said Julie Sergi, chair of the Cornerstone Association of Realtors, which commissioned a survey ahead of Wednesday’s meeting that suggested a majority of city residents opposed such a tax.”
Recap:
“…members of Hamilton City Council will hear a staff reporton additional revenue tools, including a Municipal Land Transfer Tax (MLTT). City Staff are recommending Hamilton’s MLTT be modeled after Toronto. Hamilton would have to seek provincial approval to implement an MLTT, as Toronto is the only municipality in Ontario permitted to levy a second land transfer tax.
As an example, on a $750,000 home, a buyer would have to pay:
Provincial LTT: $11,475
Municipal LTT: $11,475
= $22,950 in Total Land Transfer Taxes at time of closing.
WE NEED YOUR HELP TO STOP THIS DOUBLE TAX!
Cornerstone’s government relations team have assembled a complete advocacy strategy to oppose an MLTT. If the City of Hamilton pursues and receives provincial approval, we’re concerned additional municipalities within the Cornerstone market would follow suit.
You can help by:
- Completing this petition and share it widely.
- Telling your local ward councilor to say ‘NO’ to a Municipal Land Transfer Tax in Hamilton – ask your family, friends, and clients to send this letter to their local council member.
- Sharing our social media posts and tag your local ward councilor…
Why is the MLTT a bad policy?
1. Increased Upfront Cost for Buyers
An MLTT is an additional tax levied on top of the provincial Land Transfer Tax (LTT) when purchasing a property. This means buyers would face double the land transfer taxes.
2. Impact on Affordability
While first-time homebuyers may be eligible for a rebate for both the MLTT and LTT (up to $4,475 for each, or $8,950 in total), the rebate only covers a fraction of the tax. Potential homebuyers may be forced to sit on the sidelines or consider relocating to a neighbouring municipality that doesn’t have a second land transfer tax.
3. Impact on Property Values
A second land transfer tax could impact property values by making homes harder to sell with fewer buyers in the market. Sellers may also think twice about listing their home and moving due to high transaction costs associated with the tax.
4. Indirect Effects on Rental Affordability
An MLTT leads to higher purchasing costs for landlords to acquire rental properties, which may be passed on to tenants through higher rents. It also may dissuade investors from purchasing properties for rental purposes.
5. Economic Impact
A second land transfer tax would hurt the economy and negatively impact the real estate market and related industries, like construction and retail.
We hope we can count on your support…”
To read more, please click here.