Toronto Real Estate Board Looks Forward to Working with New City of Toronto Budget Chief on Phase-Out of Land Transfer Tax

On behalf of its over 36,000 REALTOR® Members, the Toronto Real Estate Board (TREB) congratulates Councillor Frank Di Giorgio on his appointment as Chair of the City of Toronto’s Budget Committee.  TREB looks forward to working with Councillor Di Giorgio in this critical position as he moves the City’s agenda forward, especially with regard to fulfilling Mayor Ford’s strong commitment to begin phasing out the Land Transfer Tax.

 “We applaud Councillor Di Giorgio for his commitment to the City.   The role of Budget Chief is critical to the success of our City.  We look forward to working with Councillor Di Giorgio, in his new role, as he works to address the many important budget issues facing our City, especially the negative impacts of the Toronto Land Transfer Tax,” said Ms. Hannah.

 TREB recently released the results of public opinion polling, conducted by Ipsos Reid, which found:

  • Nearly seven in ten Torontonians, 68 per cent, support plans to eliminate the Toronto Land Transfer Tax.   This is up from 65 per cent one year ago.
  • 77 per cent of GTA residents planning to purchase a home in the next two years are more likely to purchase outside Toronto specifically to avoid paying the Toronto Land Transfer Tax.
  • 72 per cent oppose municipal land transfer taxes even if this tax was dedicated for spending on transit and infrastructure.
  • 76 per cent of Torontonians who recently paid the LTT feel that they have received little or no added value in municipal services for the amount of LTT that they paid.

 “For the buyer of an average detached home in Toronto, the municipal land transfer tax costs about $10,000. It is unfair to expect people like down-sizing seniors, or young growing families who need more space, to pay so much more than their fair share,” said Ms. Hannah.

 Research has proven that municipal land transfer taxes have a negative impact on home sales. The C.D. Howe Institute recently released an analysis of the Toronto Land Transfer Tax, which shows that this tax has hurt Toronto’s economy by dampening home sales by 16 per cent.  In addition, the Ipsos Reid poll found that 25 per cent of the people who recently purchased a home in Toronto would have spent their land transfer tax money on furnishings or appliances, if they had not had to give it to the City, and 21 per cent would have spent it on renovations.

 “Housing sales create jobs because when people move they spend money on things like renovations, movers, appliances, and furnishings.  In fact, studies have shown that every resale housing transaction results in over $40,000 of spin-off spending. Every housing sale that is lost as a result of the Toronto land transfer tax risks Toronto jobs,” said Ms. Hannah.

 The noted poll results are some of the findings of an Ipsos Reid poll conducted between November 24th and 29th, 2012, on behalf of the Toronto Real Estate Board. For this survey a sample of 1,112 residents of the GTA from Ipsos’ Canadian online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results approximate the sample universe.  The precision of Ipsos online polls are measured using a credibility interval.  In this case, the poll is accurate to within +/- 3.4 percentage points of all residents in the GTA region.  The credibility interval will be larger for sub-groupings of this population.  All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

Mayor Ford to Attend Toronto Real Estate Board’s Civic Working Together Luncheon

Media representatives are invited to attend the Toronto Real Estate Board’s Civic Working Together Luncheon/Gathering For Giving Luncheon on Friday, June 14, 2013 at Sheraton Hotel, Toronto.

What:

  • TREB Civic Working Together/Gathering For Giving Luncheon
  • Remarks by Toronto Mayor Rob Ford
  • “Toronto Speaks” – exclusive and timely Ipsos Reid polling results on Toronto issues
  •  Dignitaries from all levels of governments
  •  TREB recognition of Greater Toronto shelter related charities (grant recipients)
  •  Scholarship Presentations

When:   June 14, 2013 at 12pm – 2:00pm

Where:
Sheraton Toronto, Hall E
123 Queen St.
Toronto, Ontario
M5H 2M9

Please RSVP at Helen Leung heleung@trebnet.com

TREB Contact for interviews: Von Palmer at 416-277-7381

Everyone Deserves Relief From Home Buying Tax

Not many good things can be said about Toronto’s Home Buying Tax, the Land Transfer Tax, but one thing that is worth mentioning is that City Hall gives first-time home buyers some relief from this unfair tax with a rebate of up to $3,725 (the amount payable on a $400,000 home).  Unfortunately, that could change if a potential proposal to eliminate this rebate is approved by City Council.

REALTORS® have been working hard to convince City Council to start phasing out the Toronto Home Buying Tax for all home buyers.   In fact, we recently made a presentation to the City’s Budget Committee to tell them that home buyers need to be a priority in the City’s 2014 budget, and that means starting to cut the Home Buying Tax.   The Budget Committee heard this message and recently it was announced that the City’s Budget Chief intends to bring forward a proposal to cut this tax by five percent for all home buyers.  That is good news. Unfortunately, the Budget Chief also suggested that he may consider a proposal to eliminate the rebate for first-time home buyers at the same time.  That means that first-time home buyers would pay more than what they do now, even with a five percent cut in the tax.

REALTORS® are encouraged that the City’s Budget Chief and Budget Committee are actively considering options to provide relief to home buyers from the Home Buying Tax; however, we believe strongly that all Toronto home buyers deserve relief from this hurtful tax, including first-time home buyers.

Many first time home buyers are already being forced to pay thousands of dollars in Home Buying Tax because the first-time buyer rebate has not kept pace with inflation.  Currently, this rebate caps out on a $400,000 property, but the current average price of a home in Toronto is approximately $570,000 and rising.   As a result, approximately 40 percent of first-time buyers pay some Home Buying Tax to City Hall.  Even first-time home buyers purchasing below average-priced properties are being forced to pay thousands of dollars in Toronto Home Buying Tax.  Any proposal to eliminate or reduce the first-time buyer rebate would make this situation worse. First-time home buyers deserve more relief, not less.

REALTORS® have told City Hall many times that the Home Buying Tax hurts people when they can least afford it. First-time home buyers are a perfect example of this.  Many first-time home buyers struggle to save for a down payment for that first home they are dreaming of. Every penny counts to them, and the Home Buying Tax makes that dream more difficult to achieve.

It is good news that the City’s Budget Chief is planning to bring forward a plan to cut the Home Buying Tax, but all home buyers, including first-time home buyers, should get relief. Expecting first-time home buyers to pay more tax when they can least afford it is the wrong approach. If you agree, go to www.LetsGetThisRightToronto.ca where it will take you less than a minute to make your voice heard at City Hall.

Dianne Usher is President of the Toronto Real Estate Board, a professional association that represents 37,000 REALTORS® in the Greater Toronto Area.

Follow TREB on www.twitter.com/TREBhome, www.Facebook.com/TorontoRealEstateBoard and www.youtube.com/TREBChannel

Everyone Deserves Relief From Home Buying Tax

Not many good things can be said about Toronto’s Home Buying Tax, the Land Transfer Tax, but one thing that is worth mentioning is that City Hall gives first-time home buyers some relief from this unfair tax with a rebate of up to $3,725 (the amount payable on a $400,000 home).  Unfortunately, that could change if a potential proposal to eliminate this rebate is approved by City Council.

REALTORS® have been working hard to convince City Council to start phasing out the Toronto Home Buying Tax for all home buyers.   In fact, we recently made a presentation to the City’s Budget Committee to tell them that home buyers need to be a priority in the City’s 2014 budget, and that means starting to cut the Home Buying Tax.   The Budget Committee heard this message and recently it was announced that the City’s Budget Chief intends to bring forward a proposal to cut this tax by five percent for all home buyers.  That is good news. Unfortunately, the Budget Chief also suggested that he may consider a proposal to eliminate the rebate for first-time home buyers at the same time.  That means that first-time home buyers would pay more than what they do now, even with a five percent cut in the tax.

REALTORS® are encouraged that the City’s Budget Chief and Budget Committee are actively considering options to provide relief to home buyers from the Home Buying Tax; however, we believe strongly that all Toronto home buyers deserve relief from this hurtful tax, including first-time home buyers.

Many first time home buyers are already being forced to pay thousands of dollars in Home Buying Tax because the first-time buyer rebate has not kept pace with inflation.  Currently, this rebate caps out on a $400,000 property, but the current average price of a home in Toronto is approximately $570,000 and rising.   As a result, approximately 40 percent of first-time buyers pay some Home Buying Tax to City Hall.  Even first-time home buyers purchasing below average-priced properties are being forced to pay thousands of dollars in Toronto Home Buying Tax.  Any proposal to eliminate or reduce the first-time buyer rebate would make this situation worse. First-time home buyers deserve more relief, not less.

REALTORS® have told City Hall many times that the Home Buying Tax hurts people when they can least afford it. First-time home buyers are a perfect example of this.  Many first-time home buyers struggle to save for a down payment for that first home they are dreaming of. Every penny counts to them, and the Home Buying Tax makes that dream more difficult to achieve.

It is good news that the City’s Budget Chief is planning to bring forward a plan to cut the Home Buying Tax, but all home buyers, including first-time home buyers, should get relief. Expecting first-time home buyers to pay more tax when they can least afford it is the wrong approach. If you agree, go to www.LetsGetThisRightToronto.ca where it will take you less than a minute to make your voice heard at City Hall.

Dianne Usher is President of the Toronto Real Estate Board, a professional association that represents 37,000 REALTORS® in the Greater Toronto Area.

As Toronto Budget Committee Starts Settling the Review of the 2014 Budget, Realtors® Request Everyone be Granted Home Buying Tax Relief

Today, as the City of Toronto Budget Committee initiates the final detailing of the City’s 2014 Budget appraisal, the Toronto Real Estate Board (TREB) is asking City Council to go ahead and offer help through the Toronto Home Buying Tax (Land Transfer Tax) for all people who have purchased homes, and to also maintain the help they provide to people who are buying a home for the first time. These ideas presented by TREB are undoubtedly seconded by innumerable citizens of Toronto, who have made their voices heard through several means including emails directed to the City Councilors.

Dianne Usher, President of the Toronto Real Estate Board, stated the following: “The Home Buying Tax is not helping individuals, but instead damaging them when they’re most vulnerable. It punishes people such as growing families or retirees. City Council may as well do its part in keeping Toronto within price ranges by offering help to manage Home Buying Tax for all home purchasers.”

As of late, it has been suggested in publications that the City’s Budget Committee may take into account one proposal regarding the elimination of the Land Transfer Tax on the first $200,000-$300,000 of property value for all home buyers, but at the same time remove the current rebate which currently helps first time home buyers regarding the amount of Land Transfer Tax payable up to a $400,000 home. If this modification is accepted, such a proposal would mean that first-time home purchasers would pay more Land Transfer Tax than what they must pay as of now. TREB has publicly rejected this proposal, letting the Budget Committee know that all home purchasers, as well as first time purchasers, should be helped with the Land Transfer Tax. Furthermore, TREB highlighted that first-time home buyers should receive more help and not less, since the actual first-time buyer rebate limits on a $400,000 home, despite the fact that current costs of Toronto homes are roughly around $570,000 and climbing.

Von Palmer, TREB’s Chief Government and Public Affairs Officer, said the following: “It is very true that people who are purchasing a home for the first time, even when acquiring land underneath regular prices, must pay quite a substantial amount in Toronto Home Buying Tax. Any proposal to take away the rebate which helps first-time buyers will simply make matters worse. People purchasing their first home need more help, not less.”

Furthermore, TREB has indicated to the City’s Budget Committee that the present tax rates of the Home Buying Tax are not properly set since they force the highest tax rate on those individuals who are buying homes beneath the average price range. Nowadays, the highest Land Transfer Tax rate applies to homes valued over $400,000, a disproportionate amount considering that the City’s current average is around $570,000 and rising.

“The Home Buying Tax has been increasingly regressive as home prices rise since those tax rates have not been adjusted for inflation. When someone purchases a home with a lower price than the City’s average, they must pay the highest tax rate, and that is nonsensical,” said Palmer.

TREB encourages everyone to visit www.letsgetthisrighttoronto.ca to contact City Council and express their opinion to make the best decision and eliminate the Home Buying Tax. Thousands of Torontonians have expressed themselves already.

REALTORS Call For Home Buying Tax Relief for Everyone as Toronto Budget Committee Begins to Wrap-Up Review of 2014 Budget

With the City of Toronto Budget Committee beginning to wrap-up its review of the City’s 2014 Budget today, the Toronto Real Estate Board (TREB) is calling for City Council to move forward with providing relief from the Toronto Home Buying Tax (Land Transfer Tax) for all home buyers, and to continue providing dedicated relief for first-time home buyers.  TREB’s views are being echoed by thousands of Torontonians who have been contacting City Councillors by email and other means.

“The Home Buying Tax hurts people when they can least afford it. It penalizes people like growing families or retirees. City Council should do its part in keeping Toronto affordable by providing relief from the Home Buying Tax for all home buyers,” said Dianne Usher, President, Toronto Real Estate Board.

In recent days, published comments suggested that the City’s Budget Committee may consider a proposal to eliminate the Land Transfer Tax on the first $200,000-$300,000 value of a property, for all home buyers, but to also eliminate the existing rebate that provides relief for first time home buyers on the amount of Land Transfer Tax payable up to a $400,000 home.   If implemented, such a proposal would result in first-time home buyers paying more Land Transfer Tax than what they currently pay.  TREB has spoken out against this proposal, telling the Budget Committee that all home buyers, including first time buyers, deserve relief from the Land Transfer Tax.  In addition, TREB pointed out that first-time home buyers deserve more relief, not less, because the current first-time buyer rebate caps out on a $400,000 home, but the current average price of a Toronto home is approximately $570,000 and rising.

“Even first-time home buyers purchasing below average –priced properties are currently being forced to pay thousands of dollars in Toronto Home Buying Tax.  Any proposal to eliminate the first-time buyer rebate would make this situation worse. First-time home buyers deserve more relief, not less,” said Von Palmer, TREB’s Chief Government and Public Affairs Officer.

TREB has also pointed out to the City’s Budget Committee that the current tax rates of the Home Buying Tax are regressive because they force people purchasing below-average priced homes to pay the highest tax rate.  Currently, the highest Land Transfer Tax rate kicks in on homes priced over $400,000, considerably lower than the City’s current average price of approximately $570,000 and rising.

“The Home Buying Tax has become more and more regressive as home prices have increased, because its tax rates have not been adjusted with inflation.  Someone purchasing a home priced below the City’s average price is being charged the highest tax rate. That’s not right,” said Palmer.

TREB is encouraging the public to visit www.LetsGetThisRightToronto.ca to tell City Council to do the right thing and phase out the Home Buying Tax.  Thousands of Torontonians have already done so.

GTA REALTORS Release Mid-Month Resale Housing Figures

Greater Toronto Area REALTORS® reported 2,483 residential sales through the TorontoMLS system during the first two weeks of December 2013.  This number of transactions represented an 18 per cent increase compared to 2,104 sales reported during the same period in 2012.  The number of new listings entered into the TorontoMLS system was basically unchanged from a year ago.

 “The key story in the GTA housing market continues to surround the availability of listings, or lack thereof.  With the cost of homeownership remaining affordable, we have seen a resurgence in buying activity in the second half of 2013.  However, growth in listings has not matched growth in sales.  The result has been more buyers competing for fewer listings.  This is why we continue to experience strong price growth,” said Toronto Real Estate Board President Dianne Usher.

 The average selling price for December mid-month transactions was up 10 per cent to $520,379, compared to $471,602 reported for the first 14 days of December 2012.

 “Inventory levels will remain low in many parts of the GTA in 2014, especially where low-rise home types are concerned, including single-detached and semi-detached houses and townhomes.  Expect above-inflation price growth to continue next year,” said Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis.

REALTORS Raise Concerns Over Potential Proposals to Make First Time Home Buyers Pay More Toronto Home Buying Tax

The Toronto Real Estate Board(TREB) is sounding the alarm over a potential proposal that would see first-time home buyers in Toronto paying more Toronto Home Buying Tax (Land Transfer Tax). TREB is responding to published comments indicating that the City’s Budget Committee may consider a proposal to eliminate the Toronto Home Buying Tax on the first $200,000 value of a property, for all home buyers, but to also eliminate the current rebate that relieves first-time home buyers from paying Home Buying Tax on the first $400,000 value of a property.  This potential proposal, if implemented, would result in first-time home buyers paying more home buying tax than what they currently pay.

 ”REALTORS® are encouraged that the City’s Budget Chief and Budget Committee are actively considering options to provide relief, to home buyers, from the Home Buying Tax; however, we believe strongly that all Toronto home buyers deserve relief from this hurtful tax, including first-time home buyers,” said Dianne Usher, TREB President.

 In a letter to the City’s Budget Committee, TREB pointed out that many first time home buyers are already being forced to pay thousands of dollars in Home Buying Tax because the first-time buyer rebate has not kept pace with inflation.  Currently, this rebate caps out on a $400,000 property, but the current average price of a home in Toronto is approximately $570,000, and rising.  As a result, approximately 40 percent of first-time buyers pay some Home Buying Tax to City Hall, according to City staff reports.

 ”Even first-time home buyers purchasing BELOW average-priced properties are being forced to pay thousands of dollars in Toronto Home Buying tax.  Any proposal to eliminate the first-time buyer rebate would make this situation worse. First-time home buyers deserve more relief, not less,” said Von Palmer, TREB’s Chief Government and Public Affairs Officer.

 ”We have pointed out many times that the Home Buying Tax hurts people when they can least afford it. First-time home buyers are a perfect example of this.  Many first-time home buyers struggle to save for a down payment for that first home they are dreaming of. Every penny counts to them, and the Home Buying Tax makes that dream more difficult to achieve,” said Usher.

GTA Commercial REALTORS Release Monthly Figures

In November 2013, Toronto Real Estate Board Commercial Division Members reported an annual increase in leased square feet in industrial, commercial/retail and office properties.  There was a total of 630,466 square feet of space leased on a per square foot net basis in November 2013 – up by approximately 23 per cent in comparison to 510,933 leased square feet in November 2012.

 Approximately 80 per cent of leased space, or 506,918 square feet, was accounted for by the industrial segment of the market in November 2013.  This share was down from 86 per cent in November 2012, suggesting that the mix of transactions became slightly more diverse this year compared to last.

 Average lease rates on a per square foot net basis were flat to down compared to November 2012.  Much of the change in the commercial/retail sector was due to year-over-year differences in the location and type of space leased, which is often the case when comparing monthly transactions from one year to the next.

 “In the third quarter of 2013, the Canadian economy grew at its fastest pace since 2011.  While the rate of growth was still less than we would like to see, this was still welcome news.  The uptick in economic activity in the third quarter may have prompted some businesses to lease more space,” said TREB Commercial Division Chair Cynthia Lai.

 Combined industrial, commercial/retail and office property sales were also up on a year-over-year basis in November 2013.  Total November sales amounted to 64 this year versus 58 in 2012.  The industrial and commercial/retail market segments each accounted for 25 and 26 transactions respectively. The remaining 13 deals were accounted for by the office segment.

 Average selling prices were up considerably on a per square foot basis compared to November 2012.  However, these increases, especially where the commercial/retail and office segments are concerned, can almost entirely be attributed to changes in the mix of properties sold in November 2013 compared to November 2012.  Some relatively large commercial/retail and office properties changed hands in the City of Toronto last month at prices well-above the GTA norm.

 “Looking forward, it appears that demand for commercial real estate in the GTA remains strong.  This, coupled with the fact that interest rates are expected to remain somewhat flat over the next year, suggests that pricing for commercial real estate will be stable to up in 2014,” continued Ms. Lai.

November 2013: Per Square Foot Net Commercial Leasing Summary

Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS*

Leased Square Feet Average Lease Rate

Nov. 2013 Nov. 2012 % Change   Nov. 2013 Nov. 2012 % Change

Industrial

506,918 439,570 15.3%

Industrial

$5.25 $5.26 -0.1%

Commercial

75,834 44,662 69.8%

Commercial

$14.16 $18.65 -24.1%

Office

47,714 26,701 78.7%

Office

$14.20 $14.37 -1.2%

Total

630,466 510,933 23.4%

Source: TREB Commercial Division

November 2013: Commercial Sales Completed with Pricing Disclosed on TorontoMLS*

Sales (Price Disclosed) Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)

Nov. 2013 Nov. 2012 % Change   Nov. 2013 Nov. 2012 % Change

Industrial

25 23 8.7%

Industrial

$112.53 $90.57 24.2%

Commercial

26 23 13.0%

Commercial

$424.00 $236.76 79.1%

Office

13 12 8.3%

Office

$274.12 $167.86 63.3%

Total

64 58 10.3%

Source: TREB Commercial Division

GTA REALTORS RELEASE MONTHLY RESALE MARKET FIGURES

Greater Toronto Area REALTORS® reported 6,391 residential sales through the TorontoMLS system in November, representing a 13.9 per cent increase over the sales result for November 2012.  Over the same period, new listings on TorontoMLS were down by 4.4 per cent and month-end active listings were down by 12.1 per cent.

“Growth in sales was strong for most home types in the Greater Toronto Area.  Sales growth was led by the single-detached market segment followed by condominium apartments.  Together, singles and condos accounted for almost three-quarters of total GTA transactions,” said Toronto Real Estate Board President Dianne Usher.

“With National Housing Day having just passed, housing affordability is top of mind in the GTA and indeed nationally.  Despite strong price growth and an uptick in borrowing costs this year, monthly mortgage payments on the average priced home remain affordable for a household earning the average GTA income,” continued Ms. Usher.

The average selling price for November 2013 TorontoMLS transactions was $538,881 – up by 11.3 per cent in comparison to the average of $484,208 reported for November 2012.  The MLS® Home Price Index (HPI) Composite Benchmark was up by 5.7 per cent over the same period.

“Whether we consider the average TorontoMLS selling price or the MLS® HPI Composite Benchmark, annual home price growth remained well-above the rate of inflation in November.  This makes sense given the fact that competition between buyers increased last month.  Transactions were up strongly year-over-year while the number of homes available for sale was down,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Summary of TorontoMLS Sales and Average Price November 1 – 30
2013 2012
Sales Average Price New Listings Sales Average Price New Listings
City of Toronto (“416″) 2,528 $590,366 3,849 2,234 $516,426 4,019
Rest of GTA (“905″) 3,863 $505,190 5,496 3,379 $462,907 5,756
GTA 6,391 $538,881 9,345 5,613 $484,208 9,775
TorontoMLS Sales & Average Price  By Home Type November 1 – 30, 2013
Sales Average Price
416 905 Total 416 905 Total
Detached 913 2,200 3,113 855,188 609,557 681,597
Yr./Yr. % Change 23.9% 16.3% 18.5% 16.0% 9.7% 12.3%
Semi-Detached 267 418 685 640,208 419,318 505,417
Yr./Yr. % Change -1.1% 9.1% 4.9% 9.9% 7.1% 7.4%
Townhouse 249 712 961 472,722 378,569 402,965
Yr./Yr. % Change 4.2% 10.9% 9.1% 6.4% 8.8% 7.7%
Condo Apartment 1,081 434 1,515 385,968 277,389 354,864
Yr./Yr. % Change 12.7% 14.2% 13.1% 10.0% -0.4% 7.4%