Toronto Land Transfer Tax Approved
Toronto has just passed a new land transfer tax for new home purchases. This new land transfer tax is in addition to the current Ontario land transfer tax that everyone is required to pay. Anyone who has purchased a home has needed to pay the Ontario land transfer tax. In Ontario the tax rates are (for example on a $450,000 home):
$0 - $55,000 = .005% = $275
$55,000 - $250,000 = .01% = $1,950
$250,000 - $400,000 = .015% = $2,250
$400,000 + = .02% = $1,000
Total Ontario land transfer tax = $5,475
However, now in Toronto, all new home buyers need to pay the above Ontario tax, plus an additional Toronto Land Transfer Tax. Here is the Toronto tax on a $450,000 home:
$0 - $55,000 = .005% = $275
$55,000 - $400,000 = .01% = $1,950
$400,000 + = .02% = $1,000
Total Toronto land transfer tax = $4,725
This Toronto Tax is in ADDITION to the Ontario Tax, so now a buyer in Toronto is required to pay $5,475 + $4,725 = $10,200 in tax!
WOW!
An important note is that first time buyers do not pay the Toronto Tax on the first $400,000. This seems to indicate that Toronto is looking to tax people who are buying their second home (ie. moving up or downsizing). It looks like Toronto is trying to get their hands on the increase in value that has come over the last 7 years.
Imagine this scenario: You bought a house in 2002 for $300,000 and you want to upgrade to a bigger house. Your home is now worth $400,000. If you sell it with an agent you pay $20,000 + GST and legal fees, so you only keep approximately $375,000. Now you have to buy a bigger home, but those bigger homes also cost more. So you need to buy a $500,000 home. The land transfer tax on that new home is $12,200. So plus legal fees, it costs you $515,000 for the new home. In the course of buying and selling a new home ,you have paid more than $35,000 in fees that you will never get back! If you sell that new home with an agent and you pay another commission, you now have to sell it for $575,000 to even break even!
SOLUTION: With everyone else trying to get your money, the only solution is to look after yourself, take charge and sell your own home. In the above scenario, you will save $22,000 selling your $400,000 home with ByTheOwner.com. You can now use that money to pay the land transfer tax, and keep $10,000 for yourself! Then when you sell your next home for $575,000 you will save another $30,000 is commission and GST. So using ByTheOwner.com now saved you more than $50,000. Imagine what you could do with $50,000?
