Great news for homebuyers outside Toronto! You no longer have to worry about paying thousands of dollars in local land transfer taxes. This will be a huge opportunity for Durham Region’s home owners as well as to those who dream of owning their own home one day.
What is Municipal Land Transfer Tax (MLTT)?
Last October 2015, the Ontario Ministry of Municipal Affairs and Housing indicated that they will be charging a Municipal Land Transfer Tax (MLTT) – a change that will double the land transfer taxes consumers have to pay on their next home.
If the MLTT is introduced in your community, you would be paying an additional $10,000 for land transfer taxes, based on the average-priced Ontario home ($445,000). In Toronto, where this is already in effect since 2006, the economy is already affected by MLTT. According to statistics provided by the Ontario Real Estate Association, there is already a loss of almost 15,000 jobs and a loss of $722 million in potential labour income.
In May 2014, The Ontario Liberals, during the election, stated that they had no plans to extend the double land transfer tax to other municipalities. In 2008, the city of Toronto put an MLTT in place after the Ontario government extended the powers to do so two years prior. The result of the MLTT has been significantly negative, as cited earlier. That same effect would be multiplied across Ontario if government moves ahead with its plan to include other municipalities outside Toronto.
According to the Municipal Affairs Minister Ted McMeekin, there had been no call – at all – for a municipal land transfer tax, nor was there any legislation before the House that allowed such a thing. He also stated that Toronto will remain the only Ontario city allowed to charge a land transfer tax. However, he offered to look at other existing possibilities for other new sources of revenue to help strained municipal budgets.
The Association of Municipalities of Ontario (AMO) said it wants local councils to have ‘discretionary authority’ – just like what Toronto enjoyed in levying its own land transfer tax to raise revenues for services, transit and other infrastructure. The current president of AMO, Gary McNamara, stated, “In many communities, property taxes are poorly suited to the burdens that communities face. We all need to look at new solutions that will work.”
The Ontario Real Estate Association had warned home buyers would have to dig much deeper into their pockets if local land transfer