Don't Move. Land Transfer Tax Passes
Months of lobbying, politicking and gamesmanship surrounding the controversial land transfer tax and vehicle registration tax came to an end last night as council narrowly voted in favour of both new taxes. The final version of the land transfer tax, however, represents a significant compromise over the plan first put forward by Miller back in July.
First, the good news: First time home buyers will be exempt from the tax on the first $400,000 of their home. This applies to all homes-new developments and resale homes. So if you are thinking about buying your first place, you can breath easy. If your first home costs more than $400,000, you only pay the tax on the overage amount.
Also, for anyone who enters into an agreement of purchase in sale before December 31, regardless of when your deal closes, you are exempt from the new tax. Something to think about if you are NOT a first time home buyer and you are thinking about buying in the next 3-6 months.
The bad news then is really only for people who are selling their homes and buying another home. For a $400,000 home (think Leslieville) it will cost you an additional $3725. For a $650,000 home (think The Annex) it will cost you an additional $8725. Ouch.
And of course if you own a car and it is registered to an address in this city (*hint), you will have to pay an additional $60/year for the privilege.
The compromises mean that instead of raising an estimated $350 million, the new taxes will only bring City Hall an additional $175 million in 2008. This still leaves the city about $200 million short in their projected budget for '08 and begs the question, where will the rest come from?
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