It’s coming. You have to know that it is.
I don’t know why I’m about to dedicate a blog post to this, or why we’re going to waste time discussing, when I remain 100% convinced that a municipal land transfer tax is coming to every single square inch of the Province of Ontario.
That old saying, “The three things you’re not supposed to discuss: politics, money, and religion,” certainly rings true here. But let’s start with two of the three, and who knows where we’ll end up…
Throughout the course of modern civilization, a lot has changed, and yet one thing that remains constant: people still love to bitch about taxes.
I don’t know if we want to get into a political debate here…….yet. But the Liberals, being known by most people as the “tax and spend” party, are opening the door to another tax, one which is going to make buying a home in Ontario a lot more expensive!
Although having said that, the Liberals aren’t the ones actually instituting the tax, or collecting it, but rather they’re going to give municipalities the power to impose their own tax, just like the City of Toronto does.
Hmmmm……so can I blame the Liberals for this tax, or not?
Okay, that’s not the point. We can talk about politics another time.
The discussion point for today, and likely throughout 2016, is how yet another tax on real estate transactions is going to affect home-buyers, and the market in general.
I read an editorial from the Toronto Star about a month ago that was in favour of municipalities imposing a new tax on the purchase of houses. Have a read HERE.
The article had an agenda, and a villain, in my mind. Look no further than this quote:
“But beyond those earning a commission from real estate sales, most people aren’t particularly troubled that Toronto’s scorching real estate market could have sizzled even hotter.”
Ah yes, it’s always the fault of the nasty real estate agent community, isn’t it?
For the record – real estate agents aren’t hindered by the tax, and nobody would do better or worse if there were more or less taxes. An argument could be built that with more sales, there would be more transactions, and thus agents would make more money. But the Ontario Real Estate Association says there would have been 38,227 more housing transactions over the last five years if we didn’t have the municipal land transfer tax in Toronto. So that’s 76,454 “ends” for agents, divided by five years – 15,291 per year. Divided by 43,000 agents, is about 0.33 more deals per agent.
So yeah, I don’t see Realtors clamouring about the tax.
In fact, I think the “blame Realtors” or “they’re the only ones who care” rhetoric is exactly what the proponents of these taxes need. Make it sound like “the bad guys” don’t like the tax, when in fact, nobody in Ontario wants yet another tax.
New taxes are going to be a battle; it doesn’t matter what the tax is. And there are going to be “sides” to the debate.
So what is the real estate community doing on their “side”?
Well, I think the point gets through.
Even though it’s a bit cheezy, and quite overdone, with things like “Your community could be next,” and the whole “Don’t tax my dream” tagline.
But to be quite honest, I don’t see any other industry or group standing up to the tax.
Am I wrong to assume that residents of Ontario, almost all of whom don’t want this tax, are going to benefit from organized real estate taking a stand?
Or am I wrong to even assume “most Ontarians don’t want the tax?”
Because somewhere out there, quite possibly you, reading this, right now, is somebody about to say:
You know what? I own my home, and I don’t plan on moving. I’ll be here for another twenty years, so I really don’t care about a tax on the purchase of real estate. I’d rather have that tax, than a higher property tax, or a higher income tax.
I guess I can’t argue with that.
The one point I can agree with from that stupid Toronto Star editorial was the closing line:
“The best tax, after all, is always the one that someone else is stuck paying.”
So those folks who don’t plan on moving, will have no objection to the tax.
And I suppose that’s what the government is counting on.
Like it or not, this tax is coming to every municipality in the province. Give a government the power to tax, and they will do so.
Residents of Toronto might say, “I don’t care if people in Keswick, Ontario are paying LTT. I’ve been paying it here for five years!”
And there’s that “me-first” mentality when it comes to how many people look at governance.
In any event, I think the opinions will be split on this one.
I’m eager to hear from you all.