The Municipal Land Transfer Tax is a non-starter

By MPP Toby Barrett

I’ve long said this government has never met a tax it didn’t like — whether it is taxing health, taxing death or the latest proposal, taxing the dream of home ownership.

A first house, or a new house, is the dream of many. But the provincial government proposed allowing municipalities to create a Municipal Land Transfer Tax – something already allowed in Toronto. The additional tax would have put a new home out of reach for many families, negatively impacting our economy.

This fall, Ontario’s Opposition and Ontario’s realtors rallied under the slogan “Don’t tax my dream.” Together, they managed to make a difference and got the government to reverse its decision. The Municipal Land Transfer Tax would have made Ontario one of the most uncompetitive jurisdictions in North America to own a home. This is not something we need added to such dubious honours as having the most expensive electricity, and some of the highest taxes in North America.

Ontario realtors stepped up to the plate and made the case to protect affordable home ownership. Ontario Real Estate Association president Patricia Verge wrote: “By giving the tax to municipalities across Ontario, the province will create a permanent and unprecedented change to the way homes are bought and sold along with a number of unintended consequences.”

Realtors oppose the Municipal Land Transfer Tax because:
* It will have a clear, negative impact on the Ontario economy
* It will put an unfair burden on Ontario home buyers
* It is an unsustainable, unpredictable and inappropriate tool for infrastructure and community investment
* Ontario needs a comprehensive approach to municipal fiscal challenges

Toronto’s Municipal Land Transfer Tax makes it the highest-taxed jurisdiction for home buyers in North America.

A CD Howe study on municipal land transfer taxes found families who purchase homes in more affordable areas – such as our Haldimand-Norfolk – feel the heaviest burden from the tax. The study found home buyers in more affordable areas typically have lower incomes and smaller down payments, so the tax eats further into their down payment.

When it comes to resale, instead of the hard work by the home seller realizing fair market value, prices could be pushed down to compensate what the buyer has to pay in taxes.

My colleague MPP Steve Clark tabled a recent motion calling on government to reconsider.

Clark’s private member’s motion stated: In the opinion of this House, the Government of Ontario should not impose, or help municipalities facilitate the imposition of any new municipal land transfer taxes (MLTT).

I supported Clark’s motion. An Ipsos Reid survey found 89 per cent of Ontario residents living outside Toronto opposed the creation of such a tax. The people of Ontario spoke clearly, through thousands of signatures on petitions. And again, I thank all those who spoke up and wrote in to slam the door on this tax.

In the end the motion wasn’t debated as government reversed its decision in the face of the mounting outcry.

While the victory is one to be celebrated, let’s hope it’s not just a way to stall for time and the Municipal Land Transfer Tax won’t reappear in the next budget. After all, remember the Liberals never met a tax they didn’t like.