A Two-Step Plan To Eliminate The Land Transfer Tax Responsibly
Step One: Eliminate the Land Transfer Tax in Phases
The Toronto Land Transfer Tax can be eliminated, in phases, over a number of years. This would provide time and flexibility to implement fair, transparent, and reliable options, as noted below, instead of the Land Transfer Tax.
Step Two: Strengthen City’s Budget with fair, transparent, and reliable options
Spend taxpayer dollars wisely: City Council can, and must, continue to maximize value for taxpayer dollars.
Budget accurately: In recent years, City Hall has reported unexpected operating budget surpluses worth hundreds of millions of dollars. City hall should ensure accurate budgeting to end over-taxation with the Land Transfer Tax.
Grow the City’s property tax base: Eliminating the Land Transfer Tax will make Toronto more competitive and encourage more new development and businesses to locate in Toronto, which will bring in new property tax revenue.
Be innovative: Other Cities use a variety of revenue sources that don’t target taxpayers. For example, the City of Chicago uses an innovative arrangement, known as the Chicago Infrastructure Trust, which matches public infrastructure needs with private sector investors.
Use existing City assets creatively: City Hall can creatively use existing assets to generate additional revenue, such as selling air rights above City owned parking lots, where it makes sense.
Maximize value of City’s real estate holdings: City Hall owns a huge amount of real estate, across the City, and should ensure that it is tapping into this value as much as possible.
Use un-needed City assets to reduce debt payment costs: Where it makes sense, the City could sell assets that it does not need to hold, or operate, to generate one-time revenue to pay down its capital debt, which would provide annual savings by reducing yearly debt payment.
Use fair, reliable, and transparent taxes: Other taxes do not share the same flaws as the Land transfer tax. For example, because property taxes are paid by all, they are fair and put more pressure on City Council to think twice about its spending decisions or about raising taxes.
2012 RBC-Pembina Home Location Study
Royal Bank of Canada and The Pembina Institute
Mike Colledge — President, Canadian Public Affairs, Ipsos Reid, June 1, 2012
...taxes on the transfer of property are in a sense the ultimate antimarket and antidevelopment tax.
Dr. Enid Slack, Richard M. Bird, U. of Toronto & A. Tassonyi, Ryerson U. — in "A Tale of Two Taxes", 2012