Ontario and more specifically Toronto has some of the highest tax rates in North America on new housing - and will have the highest tax rates once HST is implemented. These prices are not "insane" and are a reflection of the tax environment, land supply, labour and materials.
If you think these prices are bad, wait until the HST comes into play next year and Toronto's new development charges increases (bascially doubling) are phased in over the next couple of years once the freeze is lifted.
For many new homes and condos in the Toronto the sales tax alone would be:
13% HST
2% Provincial Land Transfer Tax (phased in rate)
2% Toronto Land Transfer Tax (phased in rate)
On a $500,000 new home/condo (basically a downtown middle class two bedroom condo) the sales taxes would cumulate to an additional $77,200 in sales/land transfer taxes.
That of course doesn't include various other taxes, charges and fees that are embedded into the price such as:
Development Charges (Municipal, Regional, Education & GO Transit)
Storm Water Management Fees
Topsoil Removal Fee
Regional Water Meter Fee
Engineering Design Review and Inspection fee
Public Art Charges (1% of construction costs in Toronto)
Engineering Fees
Parkland Dedication Fees (Cash-in-Lieu)
Building Permit Fees
Planning Fees (Various Development Application & Processing Fees)
Plan of Subdivision (singles and row houses)
Plan of Subdivision Registration/Review
Site plan approval fees
Plan of Condominium fess
Ministry of Environment Engineering Review
Land Registry Closing Fees (Title Registration)
Conservation Authority Fees
Electrical Permit - Electrical Safety Authority
Legal Fees
Costs associated with municipal by-laws
Additional costs due to recent building code changes
Toronto's Green Development Standards
Toronto's incoming green roof by-law
WSIB Premiums (Home Builder Rate Group) + WSIB Premiums passed on to builders by trades
Surcharges imposed by trades to cover potential Ministry of Labour safety fines
Tarion Registration Fees
Tarion Enrolment fees
And the list could go on... yet people still wonder why housing is increasingly becoming unaffordable...