Toronto’s mayor has unveiled a plan to increase land transfer taxes on the city’s most expensive properties, targeting a select group of high-end buyers. The proposal, set to be presented to the Executive Committee next week, aims to generate additional revenue for vital city services.
Mayor Chow envisions the extra funds – estimated at $13.8 million annually, bringing the total to $152 million by 2026 – being directed towards initiatives designed to improve affordability for all residents. Specifically, she highlighted the importance of bolstering school food programs and preventing fare increases on the TTC, while simultaneously enhancing the transit system.
The proposed tax hikes would affect properties sold for $3 million or more, with increases structured on a graduated scale. This means the higher the property value, the larger the percentage of land transfer tax paid.
For homes between $3 million and $4 million, the tax would rise from 3.5% to 4.4%. The rate climbs to 5.45% for properties valued between $4 million and $5 million, and 6.5% for those between $5 million and $10 million. The most significant increases are reserved for the highest-priced homes.
Properties exceeding $10 million but under $20 million would face a 7.55% tax, while those above $20 million would be taxed at 8.6%. The plan specifically focuses on properties containing one or two single-family residences.
The mayor framed the proposal as a matter of fairness, stating that the wealthiest 2% of property buyers – representing just half of one percent of Toronto’s population – would contribute a slightly larger share. She believes this contribution will allow for crucial investments in services relied upon by families across the city.
The anticipated benefits for the average Toronto family are estimated at around $1,200 in savings next year, a figure the mayor believes justifies asking the wealthiest residents to contribute a little more. This comes as the city faces significant financial pressures as it prepares for the 2026 budget.
However, the Toronto Regional Real Estate Board (TTREB) has voiced opposition to the proposed increases. Instead, they advocate for a first-time homebuyer rebate, arguing that relief should be targeted towards those struggling to enter the housing market.
TTREB points out that the city’s existing rebate for first-time buyers hasn’t been adjusted since 2016, leaving them to shoulder over $25,000 in land transfer taxes on an average-priced home. They believe prioritizing this group would be a more effective approach to affordability.
Despite the opposition, Mayor Chow remains steadfast in her commitment to delivering an affordable, safe, and caring city for all residents. She emphasized that the budget process is about prioritizing what truly matters for the people of Toronto.
