When the City of Toronto implemented a Land Transfer Tax (LTT) as a way to address a revenue shortfall, instead of bringing in revenue, the LTT did the opposite.
An estimated 3,500 families who would have otherwise moved, stayed put because of the LTT, according to a report from the C.D. Howe Institute and economics professors at the University of Toronto, and data from the Toronto Real Estate Board.
Those 3,500 fewer home sales cost the Toronto economy $166 million in 2008, since every time a home changes hands in Toronto the transaction generates $47,575 in economic spin-offs in furniture and appliance sales and fees to home inspectors, landscapers and lawyers, according to data from Altus Group and the Canadian Real Estate Association (CREA).
The Real Estate Board of Greater Vancouver (REBGV) explained to Translink that the BC economy heavily depends on home sales and the last thing homebuyers need is another land transfer tax when they already pay a whopping $8,000 provincial property transfer tax on a $500,000 home.
TransLink listened. Last month CEO Tom Prendergast responded with these comments:
“TransLink believes the funding mechanisms should also help us get to the future envisioned in Transport 2040. As such, we are focusing on mechanisms that will influence behaviour directly, and provide greater encouragement for people to leave their cars at home. We do not believe a property transfer tax fits this criteria, and will not be giving it further consideration.”
But where will the Evergreen Line shortfall come from?