On Wednesday, the City of Toronto approved an updated long-term financial plan, laying out a number of new housing-related revenue streams for the City as it attempts to make up its funding shortfall.
As expected, a new graduated Municipal Land Transfer Tax (MLTT) rate was established for residential properties valued at $3M and above. A 3.5% tax will be applied to homes up to $4M, a 4.5% tax on homes up to $5M, a 5.5% tax on homes up to $10M, a 6.5% tax on homes up to $20M, and, finally, homes over $20M would be hit with a 7.5% tax.
The new MLTT rates, which are payable by a purchaser when they register their new property, will come into effect on January 1, 2024.
In the financial plan, Council also directed staff to develop a multi-year approach for property tax rates and report back to Council on the possibility of increasing the Vacant Home Tax rate from 1% to 3%. The latter, if implemented, would follow in the steps of Vancouver, which raised its Empty Homes Tax to 3% in 2021.
Council also requested reports on introducing a foreign buyer land transfer tax, an emissions performance charge for buildings, and an additional land transfer tax on buyers of residential property where the purchaser owns more than one property within Toronto, with some appropriate exemptions.
In an attempt to reduce expenditures and optimize assets, City staff will look into the feasibility of reducing or removing non-residential, non-ground floor area development charge exemptions, as well as complete a review of surplus or underutilized real estate assets, and evaluate a possible graduated municipal property tax rate for high-value residential properties that are not a primary residence.
"The people of Toronto deserve a city where they can find affordable housing, rely on the TTC to get to work on time and access the programs that make life in our city better," said Mayor Olivia Chow.
The city's transportation, which has experienced numerous safety concerns alongside a decline in ridership, drew notable focus in the financial plan. The City of Toronto will request that the TTC work with the City and the Toronto Arts Council to increase ridership. Toronto will also remove on-street parking rate caps to "enable a comprehensive rate review."
Billy Bishop Airport was also mentioned, though perhaps not in a way that fans of the Island airport's generally (and relatively) cheaper flights may like. Council is requesting that staff report back on the feasibility of introducing a per-passenger levy from Billy Bishop.
"Toronto is stepping up to meet our significant financial challenges and deliver the services people need," Chow continued. "Despite the multiple actions approved by Council today we still need our partners – the Government of Canada and the Province of Ontario – to step up for the people of Toronto.”
