Real estate board says 'no' to land transfer tax

Mayor Hazel McCallion remains adamant that municipalities across Ontario, including the City of Mississauga, need more taxation powers.

McCallion said today at Council that it's no longer feasible to fund all the programs and services the City provides on the back of the property tax.

"We felt very definitively that we cannot sustain the budget on the present property tax," said McCallion.

It's a common refrain from Council as it wrestles with its budget year after year.

McCallion has said new taxes are needed for the municipality or the property tax will bear the brunt of funding an ever-increasing budget.

In October, the City considered asking Queen's Park to give it the ability to implement additional taxes outside the property tax framework. If it happened, the City would have had the option to enact a municipal land transfer tax that would bring in an additional $74 million annually.

No final decision has been made by the City on asking for more powers as Council deferred the matter for further study and public consultation.

However, councillors received a letter from the Mississauga Real Estate Board that said it's not supportive of a municipal land transfer tax and will campaign against any such tax.

The letter pointed to a recent Ipsos Reid poll conducted for the Toronto Real Estate Board that found 77 per cent of 905 residents planning to buy a home in the next couple of years said they're more likely to purchase in the 905 (such as Mississauga) to avoid paying the tax. In Toronto, 74 per cent of residents looking to buy said they'd look to the 905.

"The (MREB), its members and homeowners understand taxation is necessary for quality service, but when poorly designed it can have detrimental and unintended consequences and be unduly burdensome," read the letter, which was signed by MREB president Fawzi Mattar. "Such is the case with a municipal land transfer tax, which we believe will create a drag on economic activity, impact real estate markets and reduce Mississauga's competitiveness."

The MREB also said a recent study by the C.D. Howe Institute found the tax in Toronto has decreased home sales by an average of 16 per cent.

Not all councillors were buying the numbers, though.

Ward 9 Councillor Pat Saito said she supports increasing the municipality's taxation powers and isn't certain of the poll numbers.

"While polls are good, they aren't always accurate," said Saito, adding she believes residents would prefer to have a special tax brought in ahead of hefty increases to the property tax. "Do we like adding taxes on other things? No, of course not. But we cannot ignore any type of (potential) funding."

A land transfer tax is a one-time fee that's charged when property, including land and buildings, is transferred from one owner to another. Typically, the amount is a percentage of the purchase price and is paid by the purchaser.

Ward 1 Councillor Jim Tovey said he's "leery" of the poll numbers and the municipality currently has no other options outside the property tax.

"We need more tools in the toolbox, whatever those tools may be," he said.

He added the federal government must increase its financial support of municipalities.

Meanwhile, McCallion said the Large Urban Mayors' Caucus of Ontario is campaigning to allow municipalities more options when it comes to taxation. She believes a sales tax would be the fairest potential new tax, if the City was granted the power.

During a spirited debate about the matter in October, several councillors, including Ward 4's Frank Dale, Ward 5's Bonnie Crombie and Ward 11's George Carlson, all spoke out against a land transfer tax.

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