- After much debate for months and months, here is the new Toronto Land Transfer Tax that was just passed by Council on 22 October 2007 and takes effect on 1 February 2008. Transactions entered into prior to the end of the year will be fully exempt whenever they close. For the first two months of the year, the deals must close before February 1st 2008. After that, the full tax applies.
The new tax is an addition to the existing land transfer tax. The extra tax is payable on residential and commercial property purchases, including vacant land.
So how will this affect the real estate market in Toronto an surrounding areas?
EXISTING Ontario Land Transfer Tax:
Land transfer taxes are levied on properties that are changing hands, are the responsibility of the purchaser. Current tax rates (effective from June 1, 1989)
0.5% of the value of consideration for the transfer up to and including $55,000,
1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and
1.5% of the value of the consideration which exceeds $250,000, and
2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
ADDITIONAL NEW Land Transfer Tax :
New tax rates (on purchase agreements signed after Dec 31, 2007 and close after Feb 1, 2008).
0.5% on first $55,000,
1% on next $345,000, and
2% on portion over $400,000
Examples of new Land Transfer Tax ($)
Home Price Ontario LTT Toronto LTT Total LTT
250,000 2,225 2,225 4,450
350,000 3,725 3,225 6,950
450,000 5,475 4,725 10,200
500,000 6,475 5,725 12,200
For first time purchasers:
A rebate of up to $3,725 will apply to first-time purchasers of both new and existing homes. This means a full rebate for first-time buyers of homes valued at $400,000 or less. For example, a first-time purchaser of a home valued at $600,000 would pay land transfer tax according to the scale shown above, and receive a rebate of $3,725. A first time home buyer of a home valued at $300,000 would get a full rebate on the land transfer tax.
Why Toronto imposed new land transfer tax?
City of Toronto’s projected revenue shortfall for 2008 budget is approximately $415 million. The city will be able to raise additional $155 million by Land Transfer tax and another $20 million by the new Toronto Vehicle ownership tax. That means a revenue shortfall of perhaps $239 million for next year’s budget. This may translate into new taxes on property, alcohol, road tolls, entertainment, parking, billboards, etc.
Toronto is the ONLY jurisdiction with two home buying taxes, highest land transfer taxes in Canada and the second highest in North America.
What may happen now?
A second land transfer tax (LTT) on top of current provincial LTT, is almost 100% increase which might slow down real estate activity for short period of time only.
Home buyers will have less money for down payment, furniture, appliances or renovations. This could ultimately cost over $15,000 for an average buyer when coupled with other real estate closing costs and goods that follow home’s purchase. First-time buyers will not get affected as they will NOT pay the City’s new land transfer tax on first $400,000 of their property’s price.
Since there is no new local home buying tax in 905 region, more buyers and investors will move out of Toronto. Real estate markets outside Toronto will grow more as many investors and buyers will move into Mississauga, Oakville, Milton, Brampton, Markham, Richmond Hill, Ajax and Pickering.
Borrowed fromt he Canadian Real Estate newsletter www.newsportrealtor.com
Residential Real Estate Sales. Listing-Buying, Renovating, Additions, Custom New Build.
Tuesday, 20 November 2007
Monday, 12 November 2007
'Buying a lifestyle'; Toronto neighbourhoods are becoming branded, and part of the brand is defined by local retailers
'Buying a lifestyle'; Toronto neighbourhoods are becoming branded, and part of the
brand is defined by local retailers
National Post
Mon 01 Oct 2007
Page: A14
Section: Toronto
Byline: Garry Marr
Source: National Post
Toronto's real estate market has been on an 11-year tear, and continues to set new records
every month. The boom has dramatically transformed the city's skyline and
neighbourhoods, and changed the way many of us live. Today, Garry Marr on what
makes a neighbourhood hot.
---
If you own a house in one of Toronto's "in'' neighbourhoods, the last thing you want to
see is Bruce Elliot packing up one of his company's stores.
Mr. Elliot, the president of The Second Cup Ltd., says it happens rarely, but it will "if the
retail mix or the neighbourhood has changed. It's not good [for the neighbourhood] if we
leave."
Chi-chi coffee operators need a critical mix of high density and high incomes; retail
specialists say Second Cup and Starbucks want to see household income of at least
$90,000. "If you are a premium brand, you are looking for high household income, that is
a key driver," Mr. Elliot said.
This relationship, however, goes two ways: Buyers want to be where the premium brands
are. A neighbourhood's retailers have become so important that some agents have taken
to putting the names of the local businesses in their real estate listings, said Michael
Polzler, executive vice-president of Re/ Max Ontario-Atlantic Canada.
"People love the idea of popping into a Pusateri's in the area and buying some superexpensive
freshly squeezed orange juice. They want something they can walk to or have
a short drive to," he said. "[The local stores] play a significant role in where people want
to live."
Toronto areas have become branded, and part of the brand is defined by the shops, he
said: "People will ask where do you live: The Beach, Bloor West Village, The
Kingsway? The name of your area is synonymous with the car you drive and the stores in
your area."
Kimberley Kofman, a communications specialist, said she was more than a little excited
there was a Starbucks down the street from the house she bought in the Yonge and
Lawrence area, although it was not the deciding factor.
"The shops are an added bonus. We've got everything where we live; there's a butcher
shop, a small grocery store. You can walk to pick up anything. We have only one car, so
it's important to be able to walk to everything," Ms. Kofman said. "We like that there's a
mix of different restaurants in the area."
Rick Pennycooke's Lakeshore Group is one of the firms companies such as Second Cup
hire to scout out what the next big area will be. He said the chains will make a call on
what the next great neighbourhood will be, but for the most part real estate prices have
already begun to rise by the time the Second Cups and Starbucks come through.
"They'll look at an area and ask whether there is potential for growth. The way to do that
is to consider [zoning] applications in the area. Those take two or three years to go
through the system, so you can see what is coming down the pipe," he said. Starbucks,
said Mr. Pennycooke, wants ''a young professional from about 22 to 45 years old. That's
their core audience."
While Starbucks, Second Cup and Timothy's covet the high-end consumer, a Tim
Horton's in your neighbourhood is no sign to panic.
"They don't just service lower-income people. There are some people who are just rabidly
Tim's, regardless of income class," Mr. Pennycooke said.
Mr. Elliot said his chain is discerning on placement of a $350,000 franchise. While he
loves his 360 Second Cup stores, he is not so sure they add value to property in the area.
If anything, he thinks the presence of the high-end chain comes a bit after the fact.
And it does not have to be chains. Sometimes unbranded trendy stores in a
neighbourhood will drive housing sales. "It's the cheese boutique," Mr. Polzler said. You
don't want to see rundown diners in your neighbourhood, he added.
Take a drive along the Danforth/ Bloor corridor and you can witness the ebb and flow of
retail and how it matches the accompanying housing. "Go further east and it ain't so great,
but then you get to Greektown, then Yorkville, then it's Bathurst and then it falls off a
little. It's OK but not so great. Then you hit Bloor West Village and you're at a trendy
area," said Mr. Polzler, adding that's where the housing prices climb again.
It has almost become a game for areas to try to reinvent themselves as the place to be to
attract homeowners and retail chains.
"The Junction was lost in times for years [but] not anymore," Mr. Polzler said. "The
Junction was able to do it because people wanted to live in Bloor West but couldn't afford
to. They realized they could get the same house a little bit further north. Then the retailers
get together and they'll brand the area with signs. The Junction has that, there are signs
everywhere."
Then there's what are called "tag-along neighbourhoods" such as the North Beach or the
North Annex. "It means so much to define your neighbourhood," and that means
something to retailers, Mr. Polzler said.
"People who live in the city are buying a lifestyle and purchasing that lifestyle means
they are purchasing everything that is around them. It's a badge of honour to walk around
with your expensive coffee."
That's why it's just a bit disconcerting to see a low-end coffee shop come into your
neighbourhood or, worst yet, a cheque-cashing chain.
"Those [stores] brand a neighbourhood, too. I can tell you something about Rosedale.
The only cheque-cashing service you'll see in Rosedale is the Royal Bank of Canada."
gmarr@nationalpost.com
THE NEXT HOT AREAS:
Six next hot areas coveted by retailers, as chosen by Lakeshore Group:
1. The motel strip area of South Etobicoke along Lakeshore between the Humber River
and Fleeceline Road.
2. Queen Street West between Shaw and Dufferin (near the Drake Hotel and the CAMH
redevelopment area).
3. The Town of Milton on the east side along Derry Road between Thompson and James
Snow Parkway.
4. Sheppard Avenue between Bayview and Leslie (around the area of the former
Canadian Tire site that is being redeveloped).
5. King Street West between Shaw and Dufferin. Starbucks just went in last month at the
DNA condo building. The area will likely see another Starbucks or Second Cup-type
retailer in the next year.
6. The Town of Bracebridge in Muskoka.
Illustration:
• Black & White Photo: Tyler Anderson, National Post / A neighbourhood's retailers have
become so important that some agents are putting the names of the local businesses in
their real estate listings, says Michael Polzler, executive vice-president of Re/Max
Ontario-Atlantic Canada.
• Black & White Photo: Tyler Anderson, National Post / King Street West between Shaw
and Dufferin will likely see another Starbucks or Second Cup-type retailer next year.
Idnumber: 200710010024
Edition: Toronto
Story Type: Business
Length: 1081 words
brand is defined by local retailers
National Post
Mon 01 Oct 2007
Page: A14
Section: Toronto
Byline: Garry Marr
Source: National Post
Toronto's real estate market has been on an 11-year tear, and continues to set new records
every month. The boom has dramatically transformed the city's skyline and
neighbourhoods, and changed the way many of us live. Today, Garry Marr on what
makes a neighbourhood hot.
---
If you own a house in one of Toronto's "in'' neighbourhoods, the last thing you want to
see is Bruce Elliot packing up one of his company's stores.
Mr. Elliot, the president of The Second Cup Ltd., says it happens rarely, but it will "if the
retail mix or the neighbourhood has changed. It's not good [for the neighbourhood] if we
leave."
Chi-chi coffee operators need a critical mix of high density and high incomes; retail
specialists say Second Cup and Starbucks want to see household income of at least
$90,000. "If you are a premium brand, you are looking for high household income, that is
a key driver," Mr. Elliot said.
This relationship, however, goes two ways: Buyers want to be where the premium brands
are. A neighbourhood's retailers have become so important that some agents have taken
to putting the names of the local businesses in their real estate listings, said Michael
Polzler, executive vice-president of Re/ Max Ontario-Atlantic Canada.
"People love the idea of popping into a Pusateri's in the area and buying some superexpensive
freshly squeezed orange juice. They want something they can walk to or have
a short drive to," he said. "[The local stores] play a significant role in where people want
to live."
Toronto areas have become branded, and part of the brand is defined by the shops, he
said: "People will ask where do you live: The Beach, Bloor West Village, The
Kingsway? The name of your area is synonymous with the car you drive and the stores in
your area."
Kimberley Kofman, a communications specialist, said she was more than a little excited
there was a Starbucks down the street from the house she bought in the Yonge and
Lawrence area, although it was not the deciding factor.
"The shops are an added bonus. We've got everything where we live; there's a butcher
shop, a small grocery store. You can walk to pick up anything. We have only one car, so
it's important to be able to walk to everything," Ms. Kofman said. "We like that there's a
mix of different restaurants in the area."
Rick Pennycooke's Lakeshore Group is one of the firms companies such as Second Cup
hire to scout out what the next big area will be. He said the chains will make a call on
what the next great neighbourhood will be, but for the most part real estate prices have
already begun to rise by the time the Second Cups and Starbucks come through.
"They'll look at an area and ask whether there is potential for growth. The way to do that
is to consider [zoning] applications in the area. Those take two or three years to go
through the system, so you can see what is coming down the pipe," he said. Starbucks,
said Mr. Pennycooke, wants ''a young professional from about 22 to 45 years old. That's
their core audience."
While Starbucks, Second Cup and Timothy's covet the high-end consumer, a Tim
Horton's in your neighbourhood is no sign to panic.
"They don't just service lower-income people. There are some people who are just rabidly
Tim's, regardless of income class," Mr. Pennycooke said.
Mr. Elliot said his chain is discerning on placement of a $350,000 franchise. While he
loves his 360 Second Cup stores, he is not so sure they add value to property in the area.
If anything, he thinks the presence of the high-end chain comes a bit after the fact.
And it does not have to be chains. Sometimes unbranded trendy stores in a
neighbourhood will drive housing sales. "It's the cheese boutique," Mr. Polzler said. You
don't want to see rundown diners in your neighbourhood, he added.
Take a drive along the Danforth/ Bloor corridor and you can witness the ebb and flow of
retail and how it matches the accompanying housing. "Go further east and it ain't so great,
but then you get to Greektown, then Yorkville, then it's Bathurst and then it falls off a
little. It's OK but not so great. Then you hit Bloor West Village and you're at a trendy
area," said Mr. Polzler, adding that's where the housing prices climb again.
It has almost become a game for areas to try to reinvent themselves as the place to be to
attract homeowners and retail chains.
"The Junction was lost in times for years [but] not anymore," Mr. Polzler said. "The
Junction was able to do it because people wanted to live in Bloor West but couldn't afford
to. They realized they could get the same house a little bit further north. Then the retailers
get together and they'll brand the area with signs. The Junction has that, there are signs
everywhere."
Then there's what are called "tag-along neighbourhoods" such as the North Beach or the
North Annex. "It means so much to define your neighbourhood," and that means
something to retailers, Mr. Polzler said.
"People who live in the city are buying a lifestyle and purchasing that lifestyle means
they are purchasing everything that is around them. It's a badge of honour to walk around
with your expensive coffee."
That's why it's just a bit disconcerting to see a low-end coffee shop come into your
neighbourhood or, worst yet, a cheque-cashing chain.
"Those [stores] brand a neighbourhood, too. I can tell you something about Rosedale.
The only cheque-cashing service you'll see in Rosedale is the Royal Bank of Canada."
gmarr@nationalpost.com
THE NEXT HOT AREAS:
Six next hot areas coveted by retailers, as chosen by Lakeshore Group:
1. The motel strip area of South Etobicoke along Lakeshore between the Humber River
and Fleeceline Road.
2. Queen Street West between Shaw and Dufferin (near the Drake Hotel and the CAMH
redevelopment area).
3. The Town of Milton on the east side along Derry Road between Thompson and James
Snow Parkway.
4. Sheppard Avenue between Bayview and Leslie (around the area of the former
Canadian Tire site that is being redeveloped).
5. King Street West between Shaw and Dufferin. Starbucks just went in last month at the
DNA condo building. The area will likely see another Starbucks or Second Cup-type
retailer in the next year.
6. The Town of Bracebridge in Muskoka.
Illustration:
• Black & White Photo: Tyler Anderson, National Post / A neighbourhood's retailers have
become so important that some agents are putting the names of the local businesses in
their real estate listings, says Michael Polzler, executive vice-president of Re/Max
Ontario-Atlantic Canada.
• Black & White Photo: Tyler Anderson, National Post / King Street West between Shaw
and Dufferin will likely see another Starbucks or Second Cup-type retailer next year.
Idnumber: 200710010024
Edition: Toronto
Story Type: Business
Length: 1081 words
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