Ask around to different buyers around Toronto on how they feel about the price of a home in the city. Along with the moans of climbing prices and properties that are way out of budget, you’re also likely to hear about the Toronto land transfer tax. This tax is placed on any property purchased, in addition to the Toronto mortgage, and it’s a tax that’s the responsibility of the taxpayers. The tax has been highly criticized and disputed since its inception. And now, there’s talk of it moving to Mississauga.
The idea was first brought up by Mississauga’s Mayor, Hazel McCallion. She says, “The land transfer tax is one [option] because it’s in operation in Toronto, and it’s raised a considerable amount of money.”
And money is what Mississauga needs. This year alone the city had a $100 million deficit. Property taxes helped some but not nearly enough, raising only $27.6 million – just over a quarter of what’s needed.
When McCallion first brought the idea up to council, there was a lot of opposition. Now, that opposition is starting to cool their heels, as they look at all the expenses Mississauga really does have standing before it. The city is currently facing a $1.5 billion deficit that they poured into their infrastructure, as well as the $1.5 billion that’s going to be used to pay for the LRT line that’s yet to be built.
Should the land transfer tax be instated in Mississauga, it would greatly help by bringing in $74 million in revenue every year to the city.
Of course, it goes without saying that residents and homebuyers in the city oppose the tax. During another council meeting last month, a letter from the Mississauga Real Estate Board arrived asking city council to reconsider the land transfer tax. Along with their letter, the Real Estate Board also presented results from a survey conducted by Ipsos Reid for the Toronto Real Estate Board. Those results showed that 74 per cent of Toronto residents are more likely to purchase outside of the city where they wouldn’t be penalized by the tax.
Council didn’t pay too much attention to the survey results.
“With any poll, it depends who you ask,” said Councillor Pat Saito. “Depending on how you phrase the question, you could get a totally different answer. If you’re going to use data, it’s got to be empirical data. If you look at Toronto and how much property values have gone up in Toronto (despite the tax)…they’ve still gone up considerably.”
But just because opposition is softening doesn’t mean that everyone’s quite on board just yet.
Councillor Nando Iannicca also spoke to reporters after the meeting last month and told them what a bad idea he thinks it is.
“To me, the reason for it is simple: a drowning man will even reach for the tip of a sword,” he said. “What service does the resident get? New pipes into the home when they buy it? No, they get the old ones that were already there. It’s a tax on lifestyle choice, the desire or need to move. It’s regressive and unfair.”
It could be argued that residents will get the benefit of that LRT system; and that they’ll no longer live in a drowning city. Of course, it could also be argued that the high cost of the land transfer tax could also send those same residents into debt – not really saving them from anything at all.
What do you think? Will a new land transfer tax help Mississauga and its residents, or hurt them?
