Toronto mayor pledges to abolish stamp duty
Toronto mayor Rob Ford says he will act on his campaign promise to abolish land transfer tax, a move that has the support of Toronto real estate agents and two-thirds of residents.
Ford has pledged to first lower the tax by as much as 25% in 2012 and then abolish it entirely in stages.
Imposed in 2008, the tax adds about C$5,351 (A$5,204) to the purchase of an average Toronto house costing C$481,305 ($468,077).
A 25% reduction would save a home buyer about C$1,338 (A$1,301).
Plans to abolish the tax in Toronto, a city of about 2.7 million, follow similar calls to abolish stamp duty in Australia at the October Canberra tax forum and replace it with a broad-based land tax to improve housing affordability – as suggested by the 2010 Henry Review.
The move is likely to be heavily opposed by state governments, with recent forecasts from NSW and Victoria showing land taxes will account for about a third of state taxation revenue over the next four years.
Stamp duty is expected to bring in revenues of about C$300 million (A$291 million) for the city of Toronto in 2011.
According to reports in the Toronto Star, Ford will face opposition from some city councillors who are opposed to his plans.
“I campaigned we’d get rid of it by the end of my term and if we do it in pieces, we’ll do it in pieces, but I’m going to keep my promise,” Ford said in a recent television interview. “We’re going to be tackling that [next year].”
The Toronto Real Estate Board has applauded Ford’s pledge, with president Richard Silver saying the Land Transfer Tax “is not good for Torontonians or the city”.
“We look forward to working with the mayor and council to get rid of this unfair tax,” he says.
A recent poll found that 65% of Torontonians continue to support Ford’s commitment to repeal the Toronto Land Transfer Tax.
“Torontonians understand that the land transfer tax is not part of the solution to the city’s financial challenges; it is part of the problem,” says Silver.
“It unfairly forces home buyers and business owners to pay more than their fair share, costing the average Toronto home buyer more than $6,000 every time they move; it is an unpredictable revenue stream that goes up and down with the real estate market; and it makes the city less competitive than other GTA [greater Toronto area] municipalities,” he says.