Ontario won’t be allowing municipalities outside Toronto to levy a new land transfer tax on home sales. Postmedia Files
After weeks of dithering, the Ontario government has ruled against expanding the municipal land transfer tax beyond Toronto’s borders.

Postmedia filesThe provincial Tories lobbied against an expansion of municipal land transfer taxes. 

There is already a levy on all home sales collected by the province, and Toronto has a unique power to collect an additional tax. But more than a month after it was revealed Queen’s Park was considering allowing the province’s other 443 municipalities to collect the tax, Municipal Affairs Minister Ted McMeekin announced Tuesday the plan won’t move ahead.
“Other than in Toronto, where the power already exists, our government will not be extending Municipal Land Transfer Tax‎ powers to other Ontario municipalities,” he said.
The provincial land transfer taxes ranges from 0.5 per cent to two per cent, depending on the value of the home. Toronto’s runs a similar scale.
In Toronto, homebuyers pay an average of $12,000 in provincial and municipal land transfer taxes, according to the Ontario Real Estate Association, which lobbied hard against the change. On a $1 million home in Toronto, that bill rises to $32,200. In a red-hot housing market, that might not seem like a threat to realtors’ business, but they cautioned against allowing the tax to spread to spread to other cities.
First-time home buys get a rebate of up to $2,000 for the provincial tax and nearly double that in Toronto.
“Extending the power to levy the municipal LTT to Ontario’s municipalities would hurt the home market by adding thousands of dollars to the costs of residential transactions,” the OREA said in fact sheet about the hike. “The municipal LTT would price many low and middle income Ontarians out of the real estate market entirely.”
The Progressive Conservatives at Queen’s Park were equally critical, with deputy leader Steve Clark leading the charge against the municipal land transfer tax. He warned that expanding the tax would cost Ontarians upwards of $10,000 per home sale.
That news came out of discussions the province was having with cities about how to increase their revenues and help them handle the costs of social services. In late October, it was revealed that land-transfer taxes were part of those talks.

Tyler Anderson/National PostThe land-transfer tax is a huge money generator for Toronto, raising well over $350 million a year. 

“Looking at the consultation we did, no one was asking for a land transfer tax and there was a campaign of misinformation in the house there, and it just made sense to me and to my caucus” to announce that change, McMeekin said Tuesday after question period, where he announced the sudden about-face.
PC leader Patrick Brown lauded Clark’s work and the OREA for spreading the word and said he’s glad the Liberals changed course.
“I’ve said I’ll criticize the government when they make a bad decision; I will applaud them if they make a good decision. It is a good decision to back away from this,” Brown said.
NDP leader Andrea Horwath said it’s curious the minister announced the change with consultations ongoing. She said many cities are still struggling to balance their books after years of service downloads and she wonders what the government will do now to help replace that possible revenue.
“Municipalities are still in very bad shape,” Horwath said. “The topic had been discussed at a number of places (including) the Association of Municipalities of Ontario. I don’t know why the minister decided to get up in the middle of question period… to kind of pull something out of thin air and throw it on the table.”

Ashley Csanady
Tuesday, Dec. 1, 2015