Toronto may soon be the first city in Canada with two land transfer taxes.  This will clearly make the “dream of home ownership more difficult…especially [for] first-time buyers,” says Jim Murphy, CEO of CAAMP.

Since the tax comes out of closing costs, it will diminish the down payments many people can make.  As a result, their mortgage interest and mortgage insurance costs will rise notably.

Murphy also suggests several reforms including:

• Indexing Ontario’s and Toronto’s land transfer taxes to inflation. (The tax thresholds haven’t changed in 15 years.)
• Leveling the playing field so land transfer tax rebates apply also to resale homes instead of just new construction
• Indexing the land transfer tax rebates to cover the tax on the typical new home. (The existing rebates are far below the tax actually charged on the average Ontario and Toronto home.)
• Indexing Canada’s Home Buyer’s Plan to inflation (The $20,000 RRSP withdrawal limit hasn’t been updated in 15 years.)