City of Toronto Approves New Municipal Land Transfer Tax Rates

City of Toronto Increases Municipal Land Transfer Tax

Toronto unveils a financial strategy targeting high-value properties and vacant homes, aiming to Deal with Budget Shortfalls.

The City of Toronto unveiled an updated long-term financial blueprint aimed at bridging its funding gap. Central to the plan is the implementation of a tiered Municipal Land Transfer Tax (MLTT) for residential estates, set to take effect on January 1, 2024. Specifically, homes priced between $3M to $4M will be taxed at 3.5%, while those ranging from $4M to $5M, $5M to $10M, $10M to $20M, and above $20M will see rates of 4.5%, 5.5%, 6.5%, and 7.5%, respectively. Purchasers are obliged to pay these taxes upon property registration.

In addition to the MLTT modifications, the Council urged its team to devise a multi-annual strategy for property taxes and to consider escalating the Vacant Home Tax rate from 1% to 3%. This move mirrors Vancouver's decision to up its Empty Homes Tax in 2021. Proposals to introduce a foreign buyer land transfer tax, an emissions charge for structures, and an extra land transfer tax for buyers owning multiple Toronto properties, albeit with some valid exceptions, are also on the table. To further counterbalance expenses, the City plans to reevaluate development charge exemptions, review surplus real estate holdings, and consider a differential municipal property tax for high-end secondary residences.

Transportation, a significant city concern given safety issues and dwindling ridership, was prominently featured in the financial strategy. The City has tasked the TTC with collaborating with the Toronto Arts Council to bolster passenger numbers. On-street parking rate caps will be abolished to pave the way for an extensive rate assessment. Furthermore, a potential per-passenger fee from the Billy Bishop Airport is being explored. Addressing the comprehensive fiscal plan, Mayor Olivia Chow stated, "Toronto is stepping up to meet our significant financial challenges and deliver the services people need," but emphasized the continued need for support from the federal and provincial governments.