Land Transfer Tax Has Reduced Sales

The analysis of the Toronto Land Transfer Tax was conducted by respected economists from the C.D. Howe Institute and the University of Toronto. It determined that this tax is directly responsible for reducing sales in the City of Toronto by 16 per cent. According to the study, this means approximately 3,500 lost transactions of freehold homes in Toronto in the first year of the tax. Including condominiums, TREB estimates that the total impact could be approximately 5,000 lost transactions as a result of the Toronto Land Transfer Tax. The authors of the study carefully controlled for all other potential influencing factors, including broader economic trends, and are therefore confident that their results isolate the impact of the Toronto Land Transfer Tax.

Land Transfer Tax Has Impacted Economy

A separate study conducted for the Canadian Real Estate Association determined that every re-sale housing transaction pumps $33,425 of spin-off consumer spending into the economy on things like renovations, furniture, and appliances. This means that, by causing a loss of of 5,000 sales, the Toronto Land Transfer Tax has cost the City’s economy about $170 million.