City Hall Bureau
Sept. 1, 2008:
Labour Day, check.
Back-to-school preparations, check.
Toronto's new vehicle tax, groan.
The day is upon Toronto drivers. Starting Monday, the city's new "personal vehicle tax" kicks in.
The tax, which applies only to personal vehicles, comes to $60 a year for a car and $30 for a motorcycle.
Council approved the tax after bitter debate last fall, along with a land transfer tax that became effective Feb. 1. The new City of Toronto Act gave council the right to levy the taxes, and Mayor David Miller said the city needed the money to balance the budget.
The Ontario government has agreed to collect the tax for the city, when drivers renew their licence plate. Drivers who refuse to pay the tax won't get their plates renewed.
Toronto expects to collect about $20 million in additional revenue during the remainder of this year. The tax haul is expected to be $56 million over the course of a full year.
While drivers may not welcome the tax, Warren Barnard, lawyer for the Used Car Dealers Association of Ontario, said it's unlikely to affect car sales because the tax is levied when a plate is renewed, not when a vehicle is purchased.
If a driver is transferring a plate from an old car to a newly purchased one, the tax will come due when the existing plate is renewed, not on the purchase date.
Even if the new car requires a plate, there's no tax. It is levied when plates are renewed, not when they're first issued.
Because the tax is levied based on the car owner's address, Toronto residents can't escape the tax by buying a new car outside the city.
As for the Sept. 1 launch date, some people are simply luckier than others.
Car owners who have received a renewal notice and submit their payment on or before Aug. 31 won't have to pay the tax until they next renew their licences. So those who are renewing this month and have chosen to renew for two years won't be hit with the tax until 2010.
The new land transfer tax stirred more vehement opposition when it was introduced. City officials haven't said how much they've collected since Feb. 1, but a report is expected within the next week.
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