Ontarians see home ownership as part of the ‘Canadian Dream’ – Land Transfer Taxes seen as a barrier to home ownership

Ontarians see home ownership as part of the ‘Canadian Dream’ – Land Transfer Taxes seen as a barrier to home ownership

Kitchener-Waterloo, May 9, 2014 – Home ownership is part of the ‘Canadian Dream’ say 90% of Ontarians, but a Municipal Land Transfer Tax (MLTT), like the one imposed in Toronto, would stand in the way of this dream for seven in ten Ontarians if it were imposed in their municipality, according to new research from the Ontario Real Estate Association (OREA). In light of the unfolding provincial election, Ontario Realtors are raising awareness around the MLTT’s restrictions on home ownership and its negative economic impacts to ensure it does not spread to municipalities outside of Toronto.

“Currently, only home buyers in Toronto have to pay a second land transfer tax in addition to the provincial land transfer tax,” says Lynn Bebenek, president of the Kitchener-Waterloo Association of REALTORS®. “We want to ensure that Kitchener-Waterloo’s political leaders do not impose the tax on local home buyers. Home owners already pay enough taxes; a municipal land transfer tax would hurt the dream of home ownership for local residents.”

A new survey conducted by Ipsos Reid on behalf of OREA highlights Ontarians’ concerns over the potential implementation of an MLTT in their area which could add as much as $3,680 to the cost of a new home. Seven in ten Ontarians believe that the addition of an MLTT would:

• Limit their ability to afford a home purchase – 69%
• Make them incur more debt in order to pay the tax – 69%
• Delay their decision to purchase a home – 71%
• Make them more likely to consider buying a home in a municipality that does not charge an MLTT – 74%
• Make them spend less on renovations, furniture or appliances for the home they would purchase – 73%

Only the Government of Ontario has the authority to allow a municipality the right to implement a Municipal Land Transfer Tax. In 2008, the Government of Ontario allowed the City of Toronto to charge home buyers an additional Toronto Land Transfer Tax on top of the provincial Land Transfer Tax.

The economic losses incurred by Toronto since the tax was imposed have been significant. According to a recent report, Economic Implications of the Municipal Land Transfer Tax in Toronto, by Altus Group Economic Consulting, some of the impacts of the tax include:

• A loss of 38,278 resale home transactions
• A loss of $2.3 billion in economic activity
• A reduction of $1.2 billion in GDP
• A loss of 14,934 full-time jobs
• A loss of $772 million in wages and salaries

“The research proves how detrimental an MLTT can be for an economy,” says Bebenek. “It’s bad for the economy, adds to household debt and pushes the dream of home ownership even further away. Our local economy cannot afford the job losses and economic damage that happens when an MLTT is introduced. We need to learn from the Toronto experience and say no to the tax.”

Resale housing transactions across Ontario generate significant economic activity. The purchase and sale of homes generates fees to professionals such as lawyers, appraisers, Realtors and surveyors, as well as taxes and fees to government. In addition, homebuyers often purchase new appliances or furnishings and typically undertake renovations that tailor the new home to specific household requirements.

“The MLTT gets in the way of the economic spin-off that occurs when homes are purchased and sold,” says Bebenek. “It should be repealed in Toronto and it should never be endorsed by the provincial government for any other municipality in this province.”

The full Altus report and Ipsos Reid factum are available at http://donttaxmydream.ca

About the Ontario Real Estate Association
The Ontario Real Estate Association represents over 58,000 brokers and salespeople who are members of the 40 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com

About Altus Group Economic Consulting
Altus Group Economic Consulting was formed in February 2007 when Clayton Research Associates Limited (est. in 1972) joined in Altus Group. Altus Group Economic Consulting is a group of urban and real estate economists and provides strategic advice and information to both private and public sector clients across Canada. The division specializes in real estate market analysis, land use planning issues, property investment and financing, and building products and technology analysis. Altus Group Economic Consulting has gained a reputation for astute and independent advice and analysis, based on extensive in-house expertise, a unique information base, leading edge analytical techniques and extensive contacts throughout Canada.

Methodology (Ipsos Reid Study)
These are some of the findings of an Ipsos Reid poll conducted on behalf of the Ontario Real Estate Association (OREA) from February 28th to March 6th, 2014. For the survey, a sample of 1,537 (including 310 Torontonians) adult Ontarians was interviewed online via Ipsos’s I-Say online panel. The precision of Ipsos online surveys is measured using a Bayesian Credibility Interval. In this case, the survey is considered accurate to within +/- 2.9 percentage points, 19 times out of 20, had all adult Ontarians been surveyed and within +/- 6.3 percentage points had all Torontonians been polled. These data were weighted to ensure that the sample’s age/sex composition reflects that of the actual Canadian population according to the latest Census information.

For more information or to book an interview with the president of the Kitchener-Waterloo Association of REALTORS®, please contact:
Tania Benninger,
Communications & Government Relations Manager
519-576-1400 ext. 227