Toronto real estate board opposes investment tax meant to cool prices
The board, which represents 64,000 real estate agents, says the speculation tax will hurt “mom and pop” investors
The Toronto Regional Real Estate Board (TRREB) has denied Councilor Mike Colle’s motion to impose a speculative tax on investment buyers, driving property prices so high and making the city impossible for first-time home buyers trying to gain a foothold.
“A speculative tax could primarily affect small“ mother-and-small ”investors, who also happen to be an important source of supply for an already tense rental market,” said TRREB President Kevin Crigger, painting a picturesque picture of the investors who drive prices up. on the Toronto real estate market. The average home price tag was $ 1,163,323 in November, with 416 single-family homes averaging $ 1,807,983. “Experts, including TRREB, agree that policies that target the demand side of the market will not have sustainable long-term benefits.”
Colle, the 8th ward council that oversees rapidly developing areas like Yonge and Eglinton and Yorkdale, put the motion in Town Hall on December 15th. The motion that would call on the Ontario government to introduce a new tax that goes beyond capital gains on fins and speculators. was referred to an executive committee. The motion failed to get the two-thirds of the vote required to bypass a special committee, despite the majority of council members present, including Kristyn Wong-Tam, Michael Thompson, Joe Cressy, Gord Perks, Brad Bradford, and Affordable Housing Committee Chair Ana Bailão voted for it. Opponents included the Ontario premiere nephew Doug Ford, Michael Ford, and Denzil Minnan-Wong. Mayor John Tory was absent.
The application came at a time when the Bank of Canada’s investment buyers (who make up a quarter of the pool of buyers) are driving property prices in Toronto and beyond by competing with first-time buyers for limited supply. They make the housing market even more susceptible to a correction. Earlier this year, economists at RBC and BMO Warning made proposals that would deter some investment property buyers that would fuel a real estate bubble including a speculative tax.
But TRREB, which represents roughly 64,000 real estate agents from the Toronto area, is predictably against it. Along with the Canadian Real Estate Association and the Ontario Real Estate Association, they regularly reject all possible solutions to cool an unaffordable market other than create more supply to sell.
In an open letter to Colle, TRREB warns that a speculation tax could drive out independent investment property owners who put homes on the rental market.
“Investor ownership is a significant part of the short supply of rental apartments in Toronto,” the letter said, quoting the average rent for a one-bedroom condominium at $ 2,080. Their warning that rents could rise ignores the possibility that investment property owners who pay more will charge more if property prices continue to rise without intervention.
TRREB also cites a provincial speculation tax abandoned since 1974 that impacted home equity. A similar result would be remarkable today as homeowners are heavily in debt and are exhausting the equity of their overpriced homes.
“The best option would be for the city council to accelerate the implementation of its Expansive Housing Options in Neighborhoods initiative to enable greater diversity and number of residential units in existing neighborhoods,” said John DiMichele, CEO of TRREB, in an opinion shared with other experts who have spoken now.
The initiative is looking for ways to dense the current Toronto neighborhoods in order to preserve them, and is fighting NIMBYism to introduce more low-rise apartment buildings along with duplex, triple and alley houses in areas where there is room for spacious and semi-detached houses find too much real estate.
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Life real estate
Radheyan Simonpillai