Ontario Premier Doug Ford says he won’t step in and overrule Mayor Olivia Chow’s plan to increase Toronto’s land transfer tax for multimillion-dollar homes after the local real estate board criticized the plan.
On Tuesday morning, the Toronto Regional Real Estate Board wrote to Ford asking him to step in to block the tax plan, which Chow announced as part of the city’s upcoming budget.
“On top of some of the highest development charges in Canada, (municipal land transfer tax) increases have helped make Toronto one of the most heavily taxed housing markets in North America,” the board wrote in its letter.
The complaint came after Chow announced she would incrementally increase the land transfer tax on Toronto’s most expensive properties, valued at $3 million or above.
Her office hopes the tax will raise $152 million, saying 1,164 homes in that price bracket sold last year.
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Speaking at Queen’s Park on Tuesday, Ford said he wasn’t in favour of the mayor’s plan to raise the land transfer tax, but said he would be rejecting the real estate board’s request for provincial intervention.
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“I totally disagree with the land transfer tax (but) I will not be stepping in,” he said. “Do you know who will be stepping in? The people at the election in 2026.”
Housing Minister Rob Flack said he would “strongly encourage” Chow to rethink the move, calling for no tax increases as the cost of living continues to bite.
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“I would encourage the City of Toronto to think about it,” he told reporters. “We don’t need increased taxes … at a time of tough affordability issues, why increase taxes? It’s not right.”
Chow, however, said the change would only impact two per cent of property sales, arguing people who buy the most expensive houses can afford it.
“These are the wealthiest two per cent of luxury property buyers,” she said on Tuesday. “When you can afford a home that’s five, 10, 20 million dollars, you can pay a bit more. It doesn’t impact on 98 per cent of people buying homes. It absolutely will have no impact.”
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In its letter, the Toronto Regional Real Estate Board said the municipal land transfer tax hurts Toronto’s market.
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“The MLTT suppresses housing supply by adding thousands of dollars in costs at the time of title transfer when a property is sold,” the letter said.
“Increasing taxes on homes valued at over $3 million discourages owners from moving, reducing the number of move-up properties available. With fewer higher-end homes coming onto the market, higher-income buyers are more likely to compete in lower price ranges, intensifying pressure on first-time buyers.”
Chow said the number of high-value homes resold in Toronto had remained steady over the past three years, even as other parts of the housing market collapsed. That, she argued, is evidence the market would survive a tax increase.
“Whether the economy goes up or down, inflation goes up or down, interest rates go up or down, it doesn’t matter,” Chow said. “The same number of people buy the same number of luxury properties, about 1,100.”
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