Toronto Mass Exodus to Burbs May be Overstated, Find Out Why!
November 16th, 2007 Categories: First-Time Home Buyers, Home Buyers, News Wire, Taxation Nation
Now that we’ve had a few weeks to digest the Toronto Municipal Land Transfer Tax decision, should the Toronto real estate market brace for the predicted mass exodus to the outlying Regions?
Well, don’t roll out the yellow brick road just yet, Dorothy; once the math is done and those most likely to be impacted identified, Toronto may still be the Emerald City for first-time and move-up Toronto home buyers.
Toronto Tax Relief for First-Time Buyers
In an earlier post on this topic, I mentioned how pleased I am that first-time buyers (new and resale) will receive a rebate of the municipal land transfer tax of up to $3,725. This equals a 100% rebate on homes purchased for up to $400,000. According to the City of Toronto, for homes valued at greater than $400,000 the buyer would be taxed according to the prescribed rates and receive a rebate of $3,725.
So, if our first-time buyers are realistic as to what they can afford to buy, Toronto is still a viable (and desirable!) option.
Toronto Move-Up Buyers Take Hardest Hit
It would appear that the Toronto Land Transfer Tax will be most painful to the move-up buyer as they will be paying thousands of dollars more in closing costs in order to buy their Toronto dream home. But will this tax be the final straw that drives the Torontonian into the arms of the not-Toronto cities?
Not necessarily. Not if they do the math and take into account Toronto property taxes versus taxes in other southern Ontario cities. Also to be considered is the cost of the commute to Toronto from the outlying Regions. Check out the cost of the monthly adult pass to ride the GO to Union Station.
Toronto Real Estate Agent Predicts Tax Fall-Out
My prediction is that this new tax will not cause the move-up buyer to flee Toronto unless they truly wish to live elsewhere; a classic case of the emotional decision rationalized through logic. Toronto will continue to be seen as good value. Prudent buyers will, as always, give careful thought to all the pros and cons of where they want to live versus what they can afford. And calculators will always be useful!
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