September 14 - What’s fair about retroactive double taxation?
September 15, 2007
What’s fair about retroactive double taxation?
Toronto land transfer tax undermines housing affordability
Toronto, ON - On behalf of first-time home buyers and all others who aspire to the dream of affordable homeownership, Bob Finnigan, president of the Building Industry and Land Development Association (BILD) is urging Toronto taxpayers to reawaken to the threat of a $300 million housing tax grab by the City of Toronto.
Reacting to the launch of Toronto Mayor David Miller’s fair taxes web-site Finnigan was incredulous asking “what’s fair about retroactive double taxation?” Finnigan warned that the Mayor is not content with taxing home buyers on a go forward basis but is planning to whack buyers who purchased condos long before he even dreamed up his misguided tax scheme.
“The Building Industry and Land Development Association is fundamentally opposed to double taxation, particularly to a tax which targets one class of taxpayers (home buyers) to pay for services benefiting the entire community,” said Finnigan.
Finnigan revealed that Mayor Miller clearly intends to retroactively tax approximately 25,000 home buyers awaiting occupancy of their new homes or condos. As proof, he cited additional motion 1A from the July 16 Council debate, moved by Mayor Miller, “to develop a land transfer tax rebate to all home buyers in the amount of up to $2,000 on the condition that the purchaser demonstrate to the satisfaction of the City solicitor that the purchaser and vendor entered into a purchase and sale agreement for the property prior to July 18, 2007.”
“We were frankly shocked when we saw the actual wording of this motion. How can the City possibly conceive of retroactively taxing home buyers in this fashion? These are individuals who purchased as far back as late 2004 through 2005, 2006 and so far this year that bought with their eyes wide open as to the expected closing costs. Now the City wants to change the rules in the middle of the game and if there ever was a tax grab, this is it,” Finnigan declared.
Finnigan cited the example of a purchaser who bought a $380,000 condo in early 2006, before the City of Toronto Act was passed and long before the City proposed the land transfer tax. That buyer was originally looking at approximately $4,200 in land transfer tax. Under Mayor Miller’s scheme, the buyer is facing an $8,400 tax tab less $2,000 (net $6,400) resulting in a $2,200 retroactive tax grab.
“The Mayor would never dream (we hope) of sending homeowners retroactive property tax bills so why is he hammering innocent homebuyers, the vast majority of whom are first-timers who are scrimping and saving to make their down and monthly payments and furnish the home of their dreams, however modest? What’s fair about that”, Finnigan wants to know.
Finnigan said the only solution is for councilors to resist re-opening the debate prior to the October 22nd date, await the outcome of the provincial election as planned, assess the parties commitments on up-loading and use the meantime to look at truly fair ways of spreading the tax burden and minimizing the tax load through real and meaningful, not sensational, expenditure reductions.
With more than 1,500 members, BILD, formed through the merger of the Greater Toronto Home Builders' Association and Urban Development Institute/Ontario is the voice of the residential land development, home building and professional renovation industry in the Greater Toronto Area. We are proudly affiliated with the Ontario and Canadian Home Builders' Associations.
For further information:
Manager of Communications
416-391-3450 or 416-951-4081
Chief Executive Officer
416-391-3453 or 416-948-8654