If you think this won’t affect you, Think again. This will affect everyone in the Durham Region. Please join us in this fight.
SCUGOG — Scugog Mayor Tom Rowett is not sold on proposed new powers that would allow individual municipalities to charge their own land transfer tax fees.
The Province recently announced that it’s mulling over the idea of permitting municipalities to decide if they want to impose their own level of land transfer tax as a way to increase revenues and take the pressure off property taxes. The municipal land transfer tax would be levied on top of the existing provincial land transfer tax that must be paid when a home is purchased, essentially doubling that cost for home buyers.
On an average home in Durham priced at $420,000, the land transfer tax would double to $9,800, said Roger Bouma, the president-elect of Durham Region Association of Realtors.
“That’s money the buyer needs to come up with in addition to their down payment,” he said.
Ontario approved a similar taxation plan for the City of Toronto in 2008.
Mayor Rowett, however, is leery of introducing another layer of tax in Scugog.
Instead, explained the mayor, Scugog would “much rather look” at alternative revenue sources, such as the proposed municipal Internet service and green energy initiatives like solar panels. The Township is also keen to reduce its costs through projects like replacing traditional streetlights with LED lights.
“To me, additional revenues like adding another tax is not sustainable and we’re trying to look at solutions that are a non-tax burden,” said Mayor Rowett.
However, with the Port Perry urban area set to undergo a growth spurt in the near future with new subdivisions once the Scugog sewage plant is upgraded, the Township might consider imposing the tax on new residents coming into the community, acknowledged the mayor.
“If that’s what the existing residents want to soften the burden of growth, then I can’t say we won’t look at that,” said Mayor Rowett.
Brett Puckrin, a Port Perry realtor, warned that a new tax could not only slow sales for real estate agents but also put a damper on local economies.
“Every realtor in Ontario is against it,” said Mr. Puckrin. “Basically increasing the closing costs for a buyer in Ontario is not a good thing.”
He noted that first-time buyers may struggle with the additional costs tacked onto a home purchase and said existing homeowners may think twice about moving if they know there’s another tax to pay.
“I think the provincial government is looking to give tools to the municipalities to increase revenues … (but) it’s coming at no cost to the Province and now the municipalities will look like the bad guys,” said Mr. Puckrin.
He’s also worried that funds used to pay for the new tax will not be reinvested into communities.
“You decrease the number of (home) sales and that starts to effect the economy,” said Mr. Puckrin, noting buyers may not have the funds to purchase new appliances, furniture or paint if they have to pay thousands more in taxes.
Durham MPP Granville Anderson stressed the idea is still being studied by the Province and that no final decision has been made on implementing a new land transfer tax.
“It’s something the municipalities asked for, mostly all of them,” said Mr. Anderson. “They asked the government to give them that right (to impose the MLTT).”
If the new tax is approved by the Province, “it will be up to the municipalities if they want to impose that tax,” he added.
“It’s a misrepresentation that it’s a government-imposed tax. We’re just following the wishes of the municipalities,” said the Durham MPP. “If the municipalities want it … then I would have to support what the municipalities want.”
The Durham Region Association of Realtors opposes the proposed tax, warning it could impact the affordability of homes, slow down house sales and impact local economies.
“One of the reasons folks choose to move to Durham Region and have that front yard and back yard rather than a balcony or window is our affordability,” said Mr. Bouma.
The DRAR also states that every home transaction generates $55,000 in spin-off benefits, which creates jobs and supports local business.
The MLTT, said Mr. Bouma, “is money people won’t be spending on furniture in local stores and it’ll reduce the number of folks who want to move into your community.”
The public’s aware municipalities need more funding, but adding another layer of tax is not the way to go, said Mr. Bouma.
“We recognize municipalities are looking for extra funds for infrastructure, but I don’t think an additional tax is the solution,” he said. “To be a consistent revenue source, it requires an ongoing, very strong real estate market … and we realize the truth is there are ebbs and flows in the market.”
HOW THIS IMPACTS YOU
– If approved by the Province and introduced by municipalities, a municipal land transfer tax will double the land transfer taxes to be paid by a home buyer
– The average home price in Durham is $420,000; that would result in a land transfer tax of $9,800
– More information can be found at www.donttaxmydream.ca