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Why John Barber is wrong (part 127 of a series): Land transfer tax


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May 7, 2007
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John Barber's column in the G&M says "what's the big deal" about loading more land transfer tax on. I saw the same argument in Eye a few weeks back and it makes me crazy.

"The seller will absorb the tax" - that might be true for the few who are downsizing and are cashing out the capital in their house. For the vast majority, they are trading up and are busy paying their agent 2.5 percent while the buyer is paying Ontario two to four grand in Ontario Tax. The tax on a $363,263 house (average March 2007 price) in Toronto is $3,923 as it stands. For a first time buyer another two and a half grand on a 250k house is not nothing - especially since given the way the tax is levied a starter home in Toronto is the same as that levied on a substantial home outside of Toronto/GTA.

"It's a cost of entry" - no, that's what a development charge is. The cost of entry is for the house, buying a house where the development charge has been previously paid does not add to or subtract from the infrastructure load in Toronto.

Land transfer tax is a very bad one because it makes government party to property speculation. Taxing the gain might be okay but re-taxing the full value every time it changes hands is so lucrative it makes governments dependent on property booms. Making the price of houses more expensive is a disaster if we want to make property affordable in Toronto.

If you needed any proof that Barber is an idiot, he lauds Sorbara's "useful health tax" - yes, the health tax that was (a) largely regressive and (b) added costs to some employers (and some of them were public employers) because some arbitrators decided it was like the old OHIP Premium. My wife and I pay way more than a single earner who earns the same as we do combined.

If Barber thinks this tax is so great, he should be asking Ontario to transfer tax points to Toronto, not imposing more. To me it sounds like he won't have to pay it any time soon and thus we little people paying it will save him paying 4 or 5% on his own property tax. Or else he's renting.