Toronto Real Estate and Neighbourhoods Blog | Move Smartly

New Toronto Land Transfer Tax - Councillor Thompson and Councillor Minnan-Wong Weigh In

Rachel in Home Buying, Toronto Real Estate News

I am sharing the correspondence I received from Councillor Thompson and Councillor Minnan-Wong.  Prior to the vote held on Monday October 22, 2007, I contacted the councillors to voice my opinion, to express my concerns and to ask where they stood on the issue.  Councillor Thompson responded to my inquiries as follows:

The Toronto Land Transfer Tax

Thank you for your email concerning the new City of Toronto Land Transfer Tax and the Vehicle License tax. My position on these unfair taxes is clear: I opposed them and voted against them in Council.

It is my belief that the land transfer tax in particular was chosen as a quick fix, and not properly studied and evaluated prior to bringing it to Council. We do not know how great an impact it will have on real estate sales and business activity in the City, and we should not be rolling the dice in a knee jerk reaction to our current fiscal crisis.

 

 

The Modern on Richmond Street

John in Toronto Condos and Lofts

Cityview developments will be launching their latest condo, The Modern on Richmond Street, this Saturday November 3rd at a Broker preview event. Details are limited so far, but here's what we do know.

The condominium will be located at the north east corner of Sherbourne and Richmond. du Toit architects designed the building and Mike Niven is designing the interior space.  The 17-storey condo will have 1- and 2-bedroom units ranging in size from 450 square feet to 920 square feet with the majority under 700 square feet.  Ideal for first time buyers.

The website indicates that prices are starting from $185,990.  Assuming this price is for a basic 450 square foot unit, this puts their price per square foot at around $413 to start. 

If you're a first time buyer looking to move to the east end of the downtown core, The Modern might be the right fit for you.

John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy. Email John

Increasing Your Selling Potential: Going Professional or Not, That is the Question

Jesse in Lifestyle

House Porn. Catchy isn’t it? The words definitely caught my eye while perusing the Lifestyle section of The Globe and Mail.  At once I began to reminisce about the real estate photos I had leafed (scrolled, actually) through while shopping for my first home. Pictures are what enthralled me - I did not want to bother with the important aspects such as available parking and whether or not utilities are included in the amenities; why read the fine print if you have no interest in the appearance?

With virtual tours and real estate web sites, photography is doing to the house what naked women did for Hustler Magazine. Real estate photographs can be flashy, attractive and when they are set to snappy music, provide dual sense stimulation. However, they are only photographs, and in this world of digital retouching and the emerging industry of House Staging, determining what has been altered and hidden is near impossible.

Editor's Inbox: More on Toronto's New Land Transfer Tax, HomeOwner's Energy Audits

Urmi in Toronto Real Estate News 

Ever since I learned that developers threw in their lot with Mayor Miller, who led Toronto City Council in voting for new taxes on Monday (read Rachel's first-hand account), I have been obsessed with a single thought: "what's in it for them?"  While news coverage has detailed the hows, it hasn't elucidated on all the whys.

Now, I don't believe that developers are heinous beings - just rational economic creatures.  (That being said, I am tempted to revisit the 'heinous' angle whether I spot those tepid turquoise condos that seem to languish in sprawlburbia, sustained only by the dream of retirement in Florida.) My confusion stems from the fact that Monday's tax 'comprise' extended the first-time home buyers exemption, originally proposed for new construction purchases, to include resale purchases.  This is how the tax is being reported on the City's website, with more details to be provided at the Executive Committee meeting on October 29th. This compromise seems to reduce the advantage that the house building industry might have enjoyed.  Plus, a new tax on land transfer means more tax on the industry's primary input, no? 

Derek Raymaker, writing in yesterday's Globe, suggests one reason for the builders' acquiescence - satiation.  He reminds us that the $2,000 rebate offered to first-time buyers purchasing new construction (under the provincial land transfer tax scheme) was the result of strong industry lobbying.

Even with a break for first-time HomeBuyers, the City's new tax move could undermine the planning vision that so many of us were just getting into - high-density, compact, green core living (read my previous post on this subject). Answering his own question - "Will Toronto's new tax fuel 905 sprawl?" - Raymaker suggests that we might see the GTA revert to type thanks to a shift in industry and consumer incentives. Here is his take on consumer effects:

One [effect of the new tax] is that young families on their second or third purchase looking to repatriate back to Toronto from the affordable suburbs aren't going to bother at this point.

If they've been single-detached homeowners in Mississauga, Richmond Hill or Pickering for the last five years, they will have probably racked up a 20-to-30-per-cent appreciation in the value of their home.

That's a lot of equity, but considering the elevated cost of a similar house in most pockets of Toronto, these buyers would have to have put a big dent in their current mortgage to make the move worth it

...

Tract housing subdivisions in the outer suburbs, such as Aurora, Newmarket and Milton, are likely to see an increase in buyer interest thanks to the tax — namely from those who want to avoid it.

After assessing a similar industry shift, Raymaker ends with these words:

Could it be that Toronto council's tax-gouging ways — spurred by the do-goodery of the left-wing majority — will inadvertently give one last gasp of oxygen to the tract-housing developments that have scarred a wide swatch of the 905 region since the 1960s?

This forecast is dismaying, but it is early days yet.  We'll need to measure the impact of this tax over time.

_________

Hot on the heels of Jesse's second post on making your home eco-friendly, the Globe discusses energy audits in "This drafty old house."  Happy footprint reducing.

Urmi Desai is an economic analyst and a freelance writer specializing in urban issues.  She is editor of the Move Smartly blog.

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Bejeweled Phantoms: Will Foreign Investors Accelerate Gentrification in Toronto?

Urmi in Urban Issues, Toronto Real Estate News

A Bay St. heavyweight's startling prediction for Toronto's real estate market will worry HomeBuyers looking to become a part of the city's core, unless you are a visiting oil czar.  Under a rather ominous title, "Silent Money Pours into Toronto," Dr. Sherry Cooper, Executive Vice-President at BMO Nesbitt Burns, reports on Toronto's increasing propensity for attracting foreign capital to its downtown luxury condos and hotels.  Wealthy investors from Russia to Hong Kong are looking to diversify their assets away from the U.S., and Toronto - with its pricey Bloor St. baubles and tendency to bore terrorists - makes for a perfect acquisition.

Photo credit: FORT Architect Inc.

Cooper is frank in assessing implications.  The City of Toronto would benefit as its tax base grows to include rich buyers - enter the new land transfer tax here.  At least one astute urban issues observer, Wendy Walters, doubts whether this expanded tax base would be enough.  Existing HomeOwners in the core would see properties appreciate even more.  Cooper argues that gentrification - the nightmare of city dwellers in New York, London and Vancouver - may follow.  Torontonians have long preserved their dignity by dismissing upwardly-mobile acquaintances in glamorous locales as life-long renters or even worse - forced suburbanites.  We now have the opportunity to live the same dream.

Cooper consigns her micro-trend spotting to the anecdotal file, since Statistics Canada does not track these more nuanced investment flows.  Walters wonders if the forecast is exaggerated.  Look for numbers soon - only this week, a Globe and Mail researcher contacted our team at Realosophy to talk gentrification.  Taking Cooper's observations as valid for now, I add three of my own.

Shrinking Your Environmental Footprint as a HomeOwner - Part 2: the Government Makes Housecalls

Jesse in Lifestyle

A few weeks ago, I basked in the delicious heat on what City News described as a “whopping 32C"on Thanksgiving Monday in Toronto. Sweltering heat created a fantastic scenario of turkey dinners being eaten on decks and patios all across the city. I used to call this phenomenon Indian summer, however in our day of environmental awareness (somewhere Al Gore is polishing his Nobel Peace Prize) climate change seems to be the preferred catch phrase. Hey, if it takes 30C+ weather in October to convince the masses that daily changes should to be made to help our planet, then so be it.

I do not doubt the seriousness of our global situation but I am of strong belief that it can be reversed. Thanks to ever present environmental propaganda, apocalyptic theories of the end of world enter my thoughts daily. As a result I am constantly surveying and judging my surroundings to whether or not they are environmentally friendly. My Thanksgiving dinner host turned on his conditioner that particular holiday Monday and my thoughts strayed- wondering about the efficiency of his appliances over more important things, like how much room to leave for dessert.

Your Condominium Purchase and Insurance

Rachel in Legal, Condo Buying 

Very few people give a second thought to insurance coverage issues until disaster strikes – arguably not the best time to start wondering if you have enough coverage from your policy of insurance.  Perhaps I am being unnecessarily dramatic, because the truth of the matter is that a claim can be triggered for far less than a disaster, yet the consequences can be costly if you don’t have the right policy.

Toronto Land Transfer Tax Approved

Rachel in Urban Issues, Home Buying, Legal, Money

Councillor Thompson dropped a stack of over 1,000 sheets of paper at the start of the meeting and announced they represented ‘no’ votes to the mayors proposed tax increases.

People cheered.

Real Estate Fines: Just a Cost of Doing Business for Some Realtors

John in Toronto Real Estate News, Home Buying

The victims of a phantom (or fake) multiple offer recently came forward to tell their story to Toronto Star reporter Gail Swainson. In March 2005 Heather and Rob Pearson put in a $400K offer for a home listed for $449K in Kingston Ontario. A reasonable offer considering the home had been on the market for 7 months and needed some repairs. But at the last moment, listing agent Bill Batson informed the buyer’s agent that he received a second offer for the home. As a result of this sudden competition for the house, the Pearsons decided to offer $450K for the home and removed all conditions. The Pearsons won the house but found out a short while later that there was no competing offer on the home. A year and a half after the Pearsons won the multiple offer Bill Batson was found guilty of misrepresenting the existence of an offer to another agent.

There are two things that really stand out about this case. Firstly, it is the only phantom offer case that I know of where an agent was actually found guilty for misrepresenting the existence of an offer. While the Real Estate Council of Ontario (RECO) and the Toronto Real Estate Board (TREB) might argue that the limited number of convictions are an indication that the system works and that agents are operating ethically, I’m not sure if the truth is quite that easy. The limited number of convictions may very well be a barometer of how easy it is for an agent to create a phantom offer, how difficult it is to prove it and how reluctant some agents are to point out a phantom offer when they see it, out of fear of being black listed by their peers.

Media Roundup - October 19th 2007

Media Roundup

Um, could the fun police just stop already?  Taking new aim at the goal shared by many urban planners and dreamers alike - fostering uniquely local, thriving local businesses that add to cultural life, the Toronto Parking Authority would have liked to turn a beloved Toronto icon, the Matador, into...a parking lot...really.  Apparently, "exercisers" at the YMCA opposite need a place to park.  Really.  Fans of the late night venue's dancing good times started up www.savethematador.com in an attempt to bring some sanity to a city populated with car-loving authority figures.  The site's creator, Simon Wookey, explained his thinking thus:

The Matador is dead so long live The Matador! If the owners want to sell and move on, so let it be. Let us embrace the spirit of this city and of Jane Jacobs and reinvent this building so that we may use it to reinvest in ourselves.

Turns out, Wookey got his wish with the National Post reporting that the Matador was saved this week.

Ironically, others are applauding Toronto for undergoing a cultural renaissance - well, an architectural one at least -  at this very moment.  The New Yorker profiles Will Aslop's  Sharp Centre for Design (a.k.a the OCAD building) and his contribution to Toronto's changing visual landscape.  Note that parking lots are never mentioned.

Stand on guard: it's time to ensure that Dalton McGuinty and Co. make good on the housing, school and transit policies presented in their 2007 election platform.  In elections characterized by a record low voter turnout, an enormous pendulum shift and doubts as to whether mayor David Miller successfully lobbied for Toronto, the Ontario Liberal Party emerged the winner.   

Housing starts reached a 29-year high in Canada last month, driven largely by the strong demand for condominiums.  Condo sales are especially strong in Toronto where they are on pace to beat the 2005 all-time record.

And elsewhere in the world, the IMF predicts that the decade-long housing boom in the UK may soon meet its decline, US-style.