A veteran city councillor is looking to suspend the controversial Land Transfer Tax in a bid to stimulate Toronto’s local economy.
Doug Holyday’s efforts could be in vain because Toronto Mayor David Miller doesn’t support the idea. The tax raises too much revenue for the city that council would have to find elsewhere if the tax were scrapped, or even suspended.
Holyday told the Sun he is writing a letter to Miller and the city’s budget chief Shelley Carroll asking them to at least consider a three- to six-month moratorium on the tax to “get the housing market moving.”
“In the three or four months prior to the tax coming into effect (last February), there was a huge movement on the real estate market to avoid the tax,” he said. “Right now, there are a lot of homes on the market but they aren’t moving. I think a stimulus like this could work.”
Suspending the tax, which adds about $4,000 to the cost of an average home in Toronto, is something council can do to help the flagging economy, Holyday said.
NO APPROVAL NEEDED
“It’s something that we can do without any provincial or federal approval. We can do it on our own to help ourselves,” he said.
The Toronto Real Estate Board said yesterday any move to suspend the tax is a “step in the right direction” if it leads to doing away with it permanently.
By their estimates, every house and condo sale transaction that doesn’t take place costs the city $33,000 in spin-off economic activity in furniture and appliance sales and home renovations among other things.
They estimate 5,000 sales did not happen in 2008 because of the tax.
“That equates to $200 million in Toronto’s economy,” said Von Palmer of the Toronto Real Estate Board. “We’re pleased to see a councillor recognizing that the land transfer tax is hurting the economy.”
A December 2008 study by the C.D. Howe Institute found house sales in Toronto dropped by 16% because of the tax, and that it caused housing prices to fall 1.5%.
SOURCE: Toronto Sun, http://www.torontosun.com/news/torontoandgta/2009/01/30/8200071-sun.html
