The president of the Thunder Bay Real Estate Board is urging the city not to jump aboard the land-transfer tax train.
Carol Ann Wesselius said enacting the tax would add $2,074.70 to the $234,970 average selling price of a home in Thunder Bay and would almost certainly drive down the number of sales.
Earlier this week the Toronto Sun revealed the province intends to extend the ability for communities outside of Toronto to charge their own land-transfer tax, effectively doubling the amount home buyers would have to pay.
“It would have a significant and immediate negative impact,” Wesselius said on Wednesday.
“This means an unfair burden of added costs.”
Officials with the Ontario Real Estate Association have come out strongly against the proposal, which they say contradicts promises made by the Liberal government during last year’s election campaign.
They believe it’s nothing more than a tax grab.
“Ontario home buyers are already charged a provincial land transfer tax, so by adding a municipal tax, they’re essentially doubling the tax burden on Ontario families,” said Patricia Verge, OREA president.
“If the Ontario Liberals follow through with this plan, home buyers will be forced to pay $10,000 in total land transfer taxes on the average priced home in Ontario, starting as early as next year.”
The current tax applies to any purchase of property or land, paid to the province. It’s normally based on the land, in addition to any amount remaining on the mortgage or debt assumed as part of the purchase deal.
First-time homebuyers may be eligible for a refund of all or part of the land-transfer tax, depending on the cost of the home and the circumstances surrounding the purchase. A buyer spending $200,000 on a home would get all $1,725 of the land tax back, but someone buying a $300,000 home would only get $2,000 of the $2,975 payable.
The City of Thunder Bay has yet to disclose whether or not it would apply the tax, but acting city manager Norm Gale told Thunder Bay Television he’s looking into its status.
Wesselius said anyone opposing the provincial plan should speak to their local MPPs to express their dismay.
She also encouraged opponents to visit www.donttaxmydream.ca, a website set up to collect public opinion about the proposed plan.
“Stand up to the next tax grab,” she said.
