First Time Home Buyers To Be Protected From Land Transfer Tax

First-time buyers have become a great concern for many provincial governments as many new laws exclude them from participating in the real estate market. With high home prices, many first-time buyers find it extremely difficult to make down payments for a home or even quality for a mortgage.

But coming to the aid of first-time buyers, the Toronto city budget committee is suggesting that the government should add on tax refunds for first time home buyers to equalize integration of the land transfer tax.

According to the recommendation of the committee, an additional $750 should be made to existing tax refund for first-time home buyers but for this move to be taken, it means that other home buyers would have an increase of $750 to relocate.

However on Tuesday, the committee approved of the integration project and also added on the tax refund amount to $4,475 which was previously $3,725.

Although the committee has set forward the project, the council is still to give its approval. The tax refund will also increase on the yearly land transfer tax for the city of $77 million.

Suggestions from the budget committee states that the city should increase on its land transfer revenue this year which will be $15 million more than the previous year.

But amidst the committee’s enthusiasm, the city manager notifies that the land transfer tax is not a wise move and the budget committee chair, Councilor Gary Crawford was also in accord with the advise of the manager.

For Crawford, the high housing prices in the city jeopardizes the tax, however the city are in need of financial resources to aid buyers.

The Toronto Real Estate Board was however pleased by the committee’s effort to help first-time buyers in their time of need as home prices have left these buyer’s in a very challenging situation.

However an additional tax refund for first-time buyers means add cost on other buyers who are to move house since the provincial land transfer tax rate is higher than that of the city.

According to Von Palmer, Toronto Real Estate Board chief communications and government affairs, residents should be given a clear understanding of what the land transfer tax implies. It does not mean that the integration is equalizing revenue. Far from that, the tax simply means that there will be a 75 increase in the land transfer tax but only excludes first-time buyers.