Preperation H Stock Rises In Value

And we can thank Comrade Miller and his crew of fiscal incompetents at City Hall.

Motorists, home buyers to feel sting of city taxes
Report urges vehicle fee of $60, land transfer tax up to 1.5 per cent; booze off table for now
June 16, 2007
Jim Byers
CITY HALL BUREAU CHIEF

Tipplers can rest easy for now, but drivers and anyone who buys real estate in Toronto will be hit hard by new city taxes.

A Toronto city staff report on new taxes to boost the city's sagging bottom line won't be released until next week. But City Hall sources told the Toronto Star the report will recommend going ahead with a $60-per-vehicle registration tax and a land transfer tax that ranges from one-half of 1 per cent to 1.5 per cent of a property's value.

Mayor David Miller's office works closely with city staff on major reports such as this and the recommendations are all but certain to be passed by council.

Staff this year floated the idea of a 5 per cent tax on alcohol sold at LCBO shops and beer stores, as well as at bars and other licensed establishments.

Wineries, breweries and restaurant/bar owners have been campaigning loudly against the idea of more tax on booze, and the idea has been dropped by Toronto staff for now.

"We need more consultation with people on that issue," said a source familiar with the staff report. "We've been working staff pretty hard and they need more time to look at it."

Another official said the alcohol taxes are a "no-go" for this year but council could revisit the issue later.

While the booze tax idea has stalled, there's no such hesitation on land transfer taxes or city-imposed vehicle registration fees.

"They're easy to implement, so we may as well get going," said the source. "But they're also good policy. We need these revenues to make improvements to the lives of our residents by battling climate change and bringing in other policies."

The city this year was given new taxing powers by Queen's Park. Councillors say they're facing a $600 million deficit for next year's budget and need new revenue sources to keep the city afloat. Although the measures are clearly new fees and taxes, Mayor David Miller and other councillors frequently refer to the new moves as "revenue tools" instead of taxes.

A staff report issued earlier this year talked about a $40 tax on vehicles registered in the city of Toronto – about half the provincial levy of $74 per vehicle. Such a move would raise $43 million, the report said, which suggests that a $60 per vehicle tax would raise $64.5 million.

The earlier staff report said a flat one-half of 1 per cent land transfer tax would generate $103 million. But the source said the new recommendations would see land transfer taxes reach as high as 1.5 per cent, which could mean considerably more cash for city coffers.

Details weren't available, but the source said the idea is to have a sliding scale of land transfer taxes.

"Maybe a property valued at $100,000 would have only a one-half of 1 per cent tax, but a $1 million property would be taxed at 1.5 per cent," the source explained.

The Toronto Real Estate Board, which has argued vociferously against new land transfer taxes, says the average Toronto home currently faces a provincial land transfer tax of about $4,200.

A city of Toronto tax of just one-half of 1 per cent would mean an additional $1,900 in taxes, it says.

The report will be debated by Toronto City Council's executive committee June 25 and by city council as a whole at its July 16 to 17 session.