Ho Hum!

Business Week Online

Land Transfer Tax Has Punishing Effect on House Sales, Prices: C.D. Howe Institute

Dec 9, 2008 - 10:05 EST

TORONTO, Dec. 9 /CNW/ - Toronto's Land Transfer Tax (LTT) has had punishing effects on the Toronto housing market, reducing transactions and lowering average prices, according to a study released today by the C.D. Howe Institute. In Sand in the Gears: Evaluating the Effects of Toronto's Land Transfer Tax, authors Benjamin Dachis, Gilles Duranton and Matthew A. Turner find that the LTT caused a 16 percent decline in the number of single-family homes sold after January 2008 and a 1.5 percent reduction in house values.

They calculate the LTT will cause a reduction in household mobility - at least 3,500 families annually in the municipality of Toronto will stay in houses from which they would have otherwise moved - and an average reduction in selling price of about $6,400 per house.

The Globe And Mail

Mayor's land-transfer tax helped sink Toronto real estate market, study says

JEFF GRAY

Globe and Mail Update

December 9, 2008 at 3:20 PM EST

Amid a sinking Toronto real-estate market, Mayor David Miller's controversial new land-transfer tax is to blame for a significant chunk of falling sales and house prices, a study released by the C.D. Howe Institute today concludes.

According to the study, Mr. Miller's tax – a levy of up to 2 per cent on top of the province's existing levy – is responsible for a 16 per cent drop in sales and a 1.5 per cent drop in house prices in the city compared to its suburbs.

City finance officials had pledged that the new tax would have little effect on the city's real estate market before it was implemented in February. But the C.D. Howe study, called Sand in the Gears, concludes that the levy actually was to blame for two-thirds of the drop in the number of houses sold in Toronto from February, when the tax was implemented, until August, when the real estate market's slide began to accelerate.

“The evidence really suggests a very large impact,” C.D. Howe Institute policy analyst Benjamin Dachis said in an interview. “I'll let the evidence speak for itself.”

Toronto Condos

A new report is blaming David Miller for that sinking feeling in Toronto Real Estate.

A Toronto Real Estate Study by the C.D. Howe Institute concludes that Miller’s Tax is responsible for a 16 per cent drop in sales and a 1.5 per cent drop in city house prices conmpared to the suburbs.

The PDF Cd Howe Study is here Click

The Toronto Globe and Mail article is here.

What to do? The City of Toronto should repeal the tax immediately and offer incentives to first time home buyers. The Ontario Government should reduce their Land Transfer Tax as well to show good faith to the thousands of home owners to stimulate the Toronto Real Estate Market.

Toronto Condos and Homes for sale would benefit and this in turn helps the City and the economy.