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Ontarians say they’re taxed to the hilt

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A new research report commissioned by the Ontario Real Estate Association reveals the overwhelming majority of Ontarians feel overtaxed.

The report, Public Perceptions Regarding Municipal Government Programs, administered by Navigator, reveals that 70% of respondents believe governments should spend money more wisely before hitting them with yet more levies, including a land transfer tax.

“Taxpayers are rightly saying taxes are high enough as it is and they work hard, yet give almost half or more of their money to various levels of government through their taxes,” said OREA CEO Tim Hudak. “The last thing we need is a new tax when you purchase a home.”

In addition to a provincial land transfer tax, Toronto residents pay a municipal LTT as well, and Hudak charges that government are addicted to this revenue stream—as evidenced by discussions to expand the LTT at a recent Associations of Municipalities of Ontario conference.

Moreover, citing a C.D. Howe Institute report from May 2018, Hudak says that red tape and levies in the form of rezoning and development charges have ballooned the cost of single-detached housing in Toronto by more than $70,000, over $100,000 in Hamilton, and almost $125,000 in York Region.

“Those costs are up to $100,000 in York Region before the shovel even hits the ground,” said Hudak. “Ontario realtors invited taxpayers into the conversation because they pay the bills and they overwhelmingly said no to higher and new taxes. They want municipal governments to spend more efficiently and smarter.”

The president of the Residential Construction Council of Ontario says that municipal governments should invest in innovation rather rely solely on tax revenues. As an example, he points to Windsor, where the municipal government implemented e-permitting as a cost-cutting measure.

“There’s been exponential growth in development charges and other costs, which have caused the cost of housing to go through the roof,” said Richard Lyall. “You throw a land transfer tax on top of that—homeowners are already struggling with costs—and it’s way too much. The average tax on single-family low-rise product in the GTA is about $240,000 and on a condo it’s $160,000.”

Don’t expect talk of land transfer taxes to disappear simply because the people have spoken, added Lyall.

“The land transfer tax is more stable than development charges because if new construction in a market stalls and falters, so does the revenue source, but land transfer taxes concern existing buildings and the government can easily access that money. However, people already pay property taxes, so why should they pay an additional municipal land transfer tax? It has negative consequences for people trying to sell and move.”