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New Land Transfer Tax

lordmandeep

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why not Royal Oak is very nice...


Dundas west/ roncesvalles???
 

adma

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I wouldn't be caught dead that far west, actually. I just couldn't think of another major street that connects to Lakeshore between there and the Exhibition.
The only reason why Parkside might not seem "major" is because it's named Parkside, not Keele...
 

yyzer

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This article confirms some things, and contradicts others....we really need to know all the exact details of the new tax....this article would suggest that if you buy a condo that is closing after Feb 1, 2008, you have to pay....that is /not/ what the initial statements said....

New tax jolts home buyers

TheStar.com - GTA - New tax jolts home buyers

Some scramble to close deals in 'bit of panic' over new tax; others wonder if prices will fall

October 24, 2007
Joanna Smith
Staff Reporter

Suren Mahadevan felt forced into a snap decision.

As confused as any first-time buyer, Mahadevan was thinking carefully about whether to buy one big house where his retired parents could live with him or two condos, one for them and one for him.

But when his real estate broker told him the city of Toronto's land transfer tax was probably on its way, he made his move.

"It just made me jump on it a little bit sooner," said the 33-year-old real-estate appraiser who spent $170,000 on one condo on Monday, even before he knew whether there would be rebates for first-time buyers. "... you just pull the trigger and get one as quickly as possible."

Under the new tax approved by Toronto city council Monday night, potential homeowners have until Dec. 31 to buy, and Feb. 1, 2008 to close on their new home, to avoid paying up to 2 per cent in taxes.

The new levy will add thousands of dollars to the price of most houses in the city. If enough buyers feel the pressure, then sellers will continue to rule the market until the end of the year. Some realtors predict the market will slow down once the tax comes into effect.

"I think there will be (an increase in sales) in the next couple of months but after that it will slow down more than it would have normally," said real estate broker Darshan Sivanandarajah, who advised Mahadevan, who is now looking for a second condo, to buy now.

"I told them, `If you're going to buy for sure, you might as well do it before the land transfer tax," said Sivanandarajah, who works for Re/Max Crossroads Realty Inc., noting one young couple decided to buy their first home several months ahead of their wedding.

Another realtor, Sandra Rinomato, said that there might be "a bit of a panic" among buyers rushing to close the deal before the deadline.

"I don't know how that will necessarily affect the market compared to what it would have been and that's something that nobody will know," said Rinomato, who is also the host of the reality-television show Property Virgins. "Unless sales skyrocket, we won't ever be able to measure it effectively."

Like many other realtors, Rinomato said she is more concerned with any effects the new tax will have on sellers. She said a homeowner wanting to sell for $415,000, for example, "will have a very hard time getting over $399,999, because that's the cap for the land-transfer tax rebate for first-time buyers."

The new tax is 0.5 per cent of the first $55,000 of a home's value, 1 per cent on the next $345,000 and 2 per cent on any portion over $400,000. But first-time buyers pay nothing on the first $400,000.

Real estate broker Rachel O'Hearn said the market might see "a little flurry effect" because buyers were waiting on the new tax.

"I think now that the decision has been made, it's going to throw people into action to get it done before the end of the year," said O'Hearn, who works for Leslie Benczik Team-Re/Max All-Stars Realty Inc. in the downtown area. "And then we'll see what kind of effect it has on the market after that."

Scott Kavanagh was planning to wait until spring to buy a home in Toronto. "I'll definitely start looking more aggressively now," said Kavanagh, a 28-year-old events producer who owns a house in Stouffville. "I think it's significant enough to push me to move before the end of the year."



Some realtors are concerned sellers on the outer edges of Toronto will be adversely affected, because buyers may opt to buy elsewhere in the GTA, where there's no new tax.

Kavanagh said it has crossed his mind that if the market does slow down he might actually get a better deal in 2008 – especially if there's a spike in sales now.

"I think that's a question that will be on everyone's shoulders," he said. "There are so many variables that come into play now."
 

yyzer

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o.k., this is from the Toronto Real Estate Board website itself....I think the guy from the Star got it wrong (what a surprise!)

Details of Approved Toronto Land Transfer Tax

October 23, 2007 -- Toronto City Council has approved a municipal land transfer tax that will be levied on top of the provincial land transfer tax. TREB worked very hard to oppose this tax and commends the efforts of REALTORS® on this issue. TREB took a strong position to oppose this tax as unfair in principle and refused to compromise. As a direct result of this strong position, City Council was forced to make a number of amendments to the City’s original proposal, including rebates for first-time buyers, a reduced rate, and grandfathering for existing transactions.

The City has not yet provided detailed information on administration or implementation issues. The following is based on currently available information. Some information from the City is available here.

What was approved by City Council?

A second land transfer tax, on top of the provincial land transfer tax, at the following rates:

Residential:

0.5% of the amount of the purchase price up to and including $55,000
1% of the amount of the purchase price between $55,000 and $400,000
2% of the amount of the purchase price above $400,000
Commercial / Industrial / Etc.:

0.5% of the amount of the purchase price up to and including $55,000
1% of the amount of the purchase price between $55,000 and $400,000
1.5% of the amount between $400,000 and $40 million
1% of the amount above $40 million

When does this take effect?

February 1, 2008.

Are existing transactions grandfathered?

Yes. Any transactions where the purchaser and vendor have entered into an Agreement of Purchase and Sale for the property prior to December 31, 2007 will be rebated the full amount of the Toronto land transfer tax. The City has not yet provided clarification on how rebates will be administered. If your clients have concerns, they should check with their lawyer. Once the City of Toronto provides clarification, more information will be provided.

What about Agreements of Purchase and Sale signed after December 31, 2007 with closing dates before February 1, 2008?

Purchasers with a Purchase and Sale agreement signed after December 31, 2007 with a closing before February 1, 2008 will not be required to pay the Toronto Land Transfer tax.

What about Agreements of Purchase and Sale signed after December 31, 2007 with closing dates on or after February 1, 2008?

Purchasers with a Purchase and Sale agreement signed after December 31, 2007 with a closing on or after February 1, 2008 will be required to pay the full Toronto Land Transfer tax.

Where does this apply?

The Toronto land transfer tax only applies to transactions within the City of Toronto. This does NOT apply to property transactions outside of the City of Toronto.

Are first time home buyers affected?

First time home buyers of new AND re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000). The City has not yet provided clarification on how rebates will be administered. If your clients have concerns, they should check with their lawyer. Once the City of Toronto provides clarification, more information will be provided.

More detailed information will be provided once it is made available by the City. If you have questions, contact the City of Toronto at Access Toronto at 416-338-0338. Some information from the City is available here.

If you have questions, contact the City of Toronto at Access Toronto at 416-338-0338.
 

AlvinofDiaspar

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From the Globe:

Hiking property taxes only 'fair,' Miller says
Increase likely despite controversial new fees
JENNIFER LEWINGTON

From Wednesday's Globe and Mail

October 24, 2007 at 3:57 AM EDT

A property tax increase of 3 to 4 per cent looms next year for Toronto residents, Mayor David Miller said yesterday.

"That is fair and what I committed to do my best to do," he said one day after council approved a new land transfer tax and car registration fee that are expected to raise a total of $175-million next year.

"People have been really clear. They want their services maintained and they want investment in new services."

Every 1 per cent in property-tax increases is expected to raise $20-million from homeowners and businesses. The actual amount of any increase, to be set in the budget next spring, now depends on fresh lobbying at Queen's Park by Mr. Miller and business leaders for the province to take back responsibility for social services and help pay for transit.

"We will step up our advocacy with the province," vowed the mayor. He said council's "difficult" tax vote shows "we have done our part as Torontonians."

His focus on the province was echoed by Toronto Board of Trade president Carol Wilding, whose organization reluctantly supported the mayor's tax plan.

"It is not a matter of if, but how much and when," she said of Ontario Premier Dalton McGuinty's general commitment to rebalance the fiscal load between the province and all municipalities.

A provincial review panel comprised of officials from the province and municipalities, including Toronto, is scheduled to report back by February.

Like Mr. Miller, Ms. Wilding contends there is "no reason" the panel cannot report back by December, in time for Toronto's budget debate next spring.

Immediately after its contentious tax vote on Monday night, council went on to approve two business-friendly measures urged by Mr. Miller.

The city will ease the tax burden on small businesses over a 10-year period, instead of the 15-year schedule previously passed.

As well, the city will speed up the reduction of tax rates for big business by 2015, down from 2020 - but only with a "firm commitment" from the province on uploading.

The city's pledge, worth an estimated $300-million in relief to business, was key to the Board of Trade's endorsement of the mayor's tax plan.


Beyond the tax on home sales and the vehicle ownership fee, the city has other revenue sources at its disposal under powers granted by the province earlier this year.

City officials are expected to report next year on a possible Toronto tax on billboards, which could generate about $3-million a year.

But Mr. Miller showed little enthusiasm for a possible city-imposed tax on wine and alcohol sold at the Liquor Control Board of Ontario.

A staff report, to be debated at executive committee next week, is expected to emphasize the difficulty of levying such a tax.

The city already has ruled out taxes on cigarette sales, also permitted under the City of Toronto Act, citing potential losses to businesses located on the city border.

Even with the new tax revenues approved this year, budget chief Shelley Carroll said, "There is no question 2008 is still the pressure year."

Revenue from the new taxes is expected to trim the 2008 budget shortfall to $239-million.

To balance the books, she said, the city has to look internally for more savings beyond the $85-million targeted so far, as well as a property tax increase.

Like the mayor, Ms. Carroll turned the spotlight on Queen's Park. "We need a down payment and we cannot wait," she said.
_________________________________________________________________

Even the supposedly "right wing" Lastman never had the guts to deal with the residential-commerical property tax imbalance.

AoD
 

Blovertis

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Oh yes, a paragon of political courage is our mayor.

  • Campaign for re-election in November with nary a peep on major new taxes he planned to introduce six months later
  • When he doesn’t initially get his way on the taxes, launch a round of service cuts designed to hurt those in need the most, accompanied by a fear-mongering campaign
  • Back off on many of those cuts when the public pressure becomes too intense
  • Capitulate to the unions to the point where TCEU head Brian Cochrane is referred to as “the other deputy mayor” in the latest issue of Toronto Life
  • Back down on even the trivial issue of whether “support our troops” decals are appropriate for public vehicles.
It is long past time to stop comparing David Miller to Mel Lastman and start comparing him to a real leader.
 

Hydrogen

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First time home buyers of new AND re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000). The City has not yet provided clarification on how rebates will be administered.
So they're sticking with a rebate? This would mean paying up front and then getting the money back later. Is there no way to come up with a proof of first time purchase, and avoid the give and take exercise of a rebate scheme?
 

lordmandeep

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when they mean home prices may go down but by how much really, The value of the tax????
 

Disparishun

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So they're sticking with a rebate? This would mean paying up front and then getting the money back later. Is there no way to come up with a proof of first time purchase, and avoid the give and take exercise of a rebate scheme?
Mind you, it's hard to prove a negative... I guess they'll do, what, a title search? If so, I wonder if they will end up defining "first-time" as bounded by Ontario, just for simplicity's sake.

(I doubt if it will be limited to Toronto, since I can see people getting upset by neighbours moving in from across Steeles or whatever and getting a tax break they didn't: this is, after all, Toronto! And I would be shocked if it were meant to be worldwide, since it would be pretty odd to see the City trying to figure out whether or not someone really had bought a dwelling in Hong Kong or Haiti or Hungary before. But I had kind of suspected they might make it a Canada-wide thing. Now I am not so sure.)
 

TrickyRicky

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"Even the supposedly "right wing" Lastman never had the guts to deal with the residential-commerical property tax imbalance."

I agree Alvin but the key word is "imbalance". The city propaganda machine spins releases to the media suggesting this is business tax relief (aka tax reduction) when this is not the case. Business taxes are going up and up and up.
 

rpgr

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Miller is officially a bigger clown than Lastman.

After all this crap about land transfer taxes and vehicle registration fees in order to not raise property taxes, we are still in a huge shortfall and will have to raise property taxes anyways (which is what quite a few critics were saying).
 

unimaginative2

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I don't think that makes Miller a clown. Miller was very clear about both the budget shortfall and the revenue that would be raised by the land transfer tax. It was never going to be enough to cover the deficit entirely, and the revenue was reduced further by the compromise deal. I see nothing wrong with a property tax increase that's in line with the 905 municipalities.
 

lordmandeep

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he could cut costs by 200 million instead by freezing wages to Inflation???

However the unions would kill him by placing a mod hit on him... :(
 

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