TransLink Nixes more Property Transfer Taxes; Phew…

By
Real Estate Sales Representative with for real estate results in the Tri-Cities.

When the City of Toronto implemented a Land Transfer Tax (LTT) as a way to address a revenue shortfall, instead of bringing in revenue, the LTT did the opposite.

An estimated 3,500 families who would have otherwise moved, stayed put because of the LTT, according to a report from the C.D. Howe Institute and economics professors at the University of Toronto, and data from the Toronto Real Estate Board.

Those 3,500 fewer home sales cost the Toronto economy $166 million in 2008, since every time a home changes hands in Toronto the transaction generates $47,575 in economic spin-offs in furniture and appliance sales and fees to home inspectors, landscapers and lawyers, according to data from Altus Group and the Canadian Real Estate Association (CREA).

The Real Estate Board of Greater Vancouver (REBGV) explained to Translink that the BC economy heavily depends on home sales and the last thing homebuyers need is another land transfer tax when they already pay a whopping $8,000 provincial property transfer tax on a $500,000 home.

TransLink listened.  Last month CEO Tom Prendergast responded with these comments:

"TransLink believes the funding mechanisms should also help us get to the future envisioned in Transport 2040.  As such, we are focusing on mechanisms that will influence behaviour directly, and provide greater encouragement for people to leave their cars at home.  We do not believe a property transfer tax fits this criteria, and will not be giving it further consideration."

Phew!

But where will the Evergreen Line shortfall come from?

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Rainmaker
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Toronto, ON

John - Some of the spin-off effects due to a house sale would not necessarily flow to the City of Toronto (i.e. the 416/647 area) but rather the 905/289 area.  Thus, the $166 million could be overstated.

Aug 31, 2009 11:22 AM #1
Rainmaker
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John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

While I'm not an economist, I would have thought that the economics professors at the University of Toronto would have considered this, but you just never know.

Thanks for stopping by to comment Marc.

 

Aug 31, 2009 05:16 PM #2
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Rainmaker
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