Toronto City Council has passed a motion to hike the land transfer tax on home sales above $3 million as the city looks for additional revenue.
The move means those buying a home worth $3-4 million will pay a 4.4 per cent Municipal Land Transfer Tax (MLTT). That amount will increase on a scale, with anyone buying a home worth more than $20 million paying an 8.6 per cent tax to the city.
Chow said she is “asking luxury homebuyers to chip in more” to make life more affordable for families in the city.
“It’s clear that the impact of our current economic uncertainty is not being evenly felt across our city. Many people are at risk of losing their jobs and finding it harder to make ends meet,” Chow wrote in a letter accompanying the motion.
“Some continue to do very well. I’m asking the 2% of buyers purchasing luxury homes far beyond what average Torontonians can afford to chip in more. Those who can afford five or ten million dollar homes can afford to pay their fair share.”
The motion passed with 17 councillors in favour and seven voting against it.
The vote followed a heated debate between Mayor Olivia Chow and Coun. Brad Bradford on the council floor, with Bradford telling Chow, “Torontonians are tired of you raising everybody’s taxes all the time.”
Chow in turn attacked Bradford’s record, accusing him of cutting TTC service while raising fares in 2023.
Chow introduced the hike for more expensive homes back in 2023. She said the hike affected just two per cent of home sales in 2024, and brought in an additional $138 million for city coffers.
But Coun. Stephen Holyday said while the tax may not hit many homes at the moment, it eventually will as prices increase.
“Very clearly, this is a tax meant to take money from someone that earned it and to give it to somebody else that didn’t,” he said. “And you have to ask, why are we here as a municipal government? What are the services that we provide to the city and what is our role in society?”
The average home price across all housing types in Toronto sits at about $1.1 million.
Coun. Diane Saxe said she is supporting the move, but told the mayor she did Rosedale “a disservice” by suggesting people there can afford to pay more.
“Some of those big houses are subdivided into many different parts. The apartment buildings that were blockbusted into Rosedale provide accommodation for people of all kinds of income levels,” Saxe said.
“There are widows taking extra jobs in their senior years to try to keep the family home for their families. There are a lot of people in that area who can pay more, and there are people for whom this is a hardship.”
The Toronto Regional Real Estate Board (TRREB) had urged the city to vote down the increase, going so far as asking Premier Doug Ford to block it. Ford declined to block the tax increase, but said he disagrees with it.
TREBB noted it’s the third increase in the last eight years for Toronto’s land transfer tax, and said the hikes “have created a prohibitive barrier to homeownership and hurt Toronto’s housing market.”