Changes have come to Toronto’s land transfer taxes effective this past January 1, 2024. As Toronto continues to grow with more people moving to the city and its surroundings, more infrastructure is needed in order to house and finance the city’s updates. Some real estate agents claim this is the major driver for the increase in land transfer taxes for luxury homes however we can never really know for sure. Let’s dive into the details of this increase and what it means for your future sale or purchase!
The New Land Transfer Tax
This luxury land transfer tax increase came into effect on January 1, 2024. Essentially, an increase was placed on land transfer taxes in the city starting at 3.5% and incrementally increasing depending on the bracket that the home sells for. For example, a home that sells for $3-$4 million will incur a tax of 3.5%, a property selling $4-$5 million will incur 4.5% tax, a home for $5-$10 million will incur 5.5% tax and so forth.
Who Will This Impact
This certainly did impact luxury sales in late 2023 as more luxury home sales were closed before the end of the year to avoid the tax hike. The average house price in Toronto however is $1.2-$1.4 million dollars and homes of this price range will not be impacted tremendously or at all. Approximately 6 homes in Toronto were sold for over $13.5 million in 2023 compared to the 6000+ other house sales of more average sales prices. That means less than 1% of the population was affected by the tax increase and it won’t affect you if you’re looking to purchase an average-priced property.
How Will It Affect House Hunting
As mentioned, this land transfer tax increase will predominantly affect those whose properties are selling for $13.5 million and up. At the $13.5 million price point, the land transfer tax doubles. In 2023 the tax would have amounted to somewhere in the $300,000s whereas now it adds up to somewhere in the $600,000s. That’s quite a significant increase! Because of this, future buyers in the luxury market will be able to use this as a negotiating tactic for a better price.
Average buyers, however, need not panic! If you’re buying a home under $3 million then the new tax increase likely won’t make a difference in how much land transfer tax you pay.
Contact Zoie Conforti Today!
Whether you’re looking to buy a home under $3 million or you need assistance navigating the luxury housing market, I can help!
Having an experienced realtor in the GTA on your team who knows the ins and outs of the real estate world can make all the difference. Call me today at 647.293.8773 so we can achieve your real estate goals together!
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