The high-level housing tax will expel Toronto’s talent, real estate CEO warns

Vacant and luxury housing taxes recently proposed by Toronto councilors would not crush the local real estate market as similar taxes did in Vancouver, but accumulating more fees would erode the city’s ability to attract talent from other places, the chief says. from Sotheby’s International Realty Canada.

“I don’t think taxes are the right way to do it. We’re already paying more taxes than people pay in other countries,” said CEO Don Kottick. “If you continue to impose taxes, we will become anti-competitive.”

Toronto Coun. Ana Bailao (Ward 9 Davenport), the city’s key housing person, supports a vacant housing tax similar to Vancouver’s which raised around $ 40 million last year. She also favors a tax on luxury homes. Some Toronto councilors have proposed a 3 percent tax on homes that sell for $ 3 million or more.

Toronto is also the only municipality in Ontario that also applies its own land transfer tax in addition to the provincial one.

“At some point people will say,” Enough is enough, “said Kottick.

Instead of taxing real estate, governments should accelerate the planning and approval of buildings to increase the supply of homes at all prices, he said.

Sotheby’s “first-year end-of-year real estate report”, published on Wednesday, shows that higher-priced residential real estate sales recovered from a dull 2018 and gained momentum as 2019 progressed. Toronto metropolitan area, including condominiums, priced between $ 2 million and $ 4 million, increased 12% year-over-year. Homes and condos that sold for $ 1 million to $ 2 million increased 25 percent last year, compared to 2018.

“If we had more offer, there would probably have been many more sales as well,” Kottick said.

The relatively small super-luxury segment of the Toronto metropolitan area market (properties that sold for $ 4 million or more) decreased 3 percent last year with 228 sales.

But Sotheby’s says that number probably reflects a migration to exclusive listings of high-level properties by sellers who want to prevent sales prices from being published through the Multiple Listing Service of the real estate industry.

Kottick said the fall season eclipsed the traditionally busier spring last year in Toronto, Vancouver and Montreal. But in Vancouver, property sales of more than $ 4 million remained 12 percent below 2018 levels in the last half of the year due to taxes on vacant homes, homes worth $ 3 million or more and foreign buyers.

Home sales priced between $ 1 million and $ 2 million in the city of Toronto increased 23% year-over-year in 2019. Within city limits, there were 5% more home sales greater than $ 4 million

Sotheby’s report calls the bull market up for the last 10 years, slowing world economies and the threat of a recession of good news for Canada’s high-end real estate market.

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“Major metropolitan markets across the country saw a notable increase in consumers of rich real estate … as an alternative to investing in stocks and shares to diversify portfolios, protect against inflation and cushion volatility and risk of financial markets, “the report said.

Barry Cohen broker, Re / Max Realtron Barry Cohen Homes Inc., reported last week that there were 125 homes valued at $ 5 million or more sold in the GTA in the last six months of 2019, an increase of 14% during the same period in 2018.

Last year was the second best year in the last five for sales of more than $ 5 million homes, he said. 194 homes were sold in that price category in 2017. Lawrence Park South, Rosedale-Moore Park and Bridle Path experienced annual sales growth of 250 percent, 200 percent and 100 percent, respectively, in the amount of $ 5 million – more home sales, Cohen said.

With files by Jennifer Pagliaro

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