News
Canadian property taxes to rise
Canadian property taxes in Toronto are to rise 3.8 per cent this year compared with the three per cent increase every year since 2003, writes Jo-ann Hodgson
This figure is more than double the ceiling figure Mayor David Miller had promised in last year's election campaign.
Miller defended the move to raise Canadian property taxes, despite promising to hold the increase "in line" with inflation – 1.5 per cent for the City of Toronto. "Torontonians expected there would a tax hike of around 3 per cent," he said in the Canadian newspaper Globe and Mail. He added that the extra 0.8 per cent of tax will go to fund the $14million needed for new and improved services this year.
Despite Toronto's city departments and agencies being told not to increase their spending, their budgets have risen by 9.3 per cent to CDN$3.4billion, led by a 9.3 per cent rise for the Toronto Transit Commission and a 7.4 per cent rise for solid waste services.
The tax increases will generate CDN$73 million in new revenue for the city. On an individual level, the increases will mean an extra CDN$79.55 on tax for an average residential home with an assessed value of CDN$369,300.
Miller is also proposing a Land Transfer Tax increase which will also have an impact on buyers. "The average home in Toronto costs CDN$378,000 and buyers currently have to pay CDN$4145.00 in Land Transfer Tax to the Ontario Provincial Government," Toronto realtor Boris Piko commented."Miller is proposing an additional 0.5 per cent Land Transfer Tax for the City of Toronto. This will increase the cost of buying average home by CDN$1890.00.
"This increase may divert the buyers from the City to the other GTA areas like Mississauga and is not a very smart move by Mayor Miller," Piko claimed.
Meanwhile, in British Columbia, the government has tabled a quality of life budget in which the homeowners will benefit from lower taxes. Last September, the British Columbia Real Estate Association (BCREA) recommended the government develop a phased three-year plan leading to elimination of the Property Transfer Tax (PTT) by 2009, beginning with an update of the tax exemption thresholds for first-time buyers to CDN$375,000.
The PTT is a registration tax a property buyer must pay when purchasing or acquiring an interest in property. The amount payable is charged as one per cent on the first CDN$200,000 plus two per cent on the remainder.
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13 April 2007