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Combined Sales Tax Could Cost Homebuyers Thousands

well most new condos are well under 400k...

plus very few new single detached homes are being built inside Toronto.
 
It's also a good point that homes under $400,000 are exempt, and homes under $500,000 are partially exempt. The rich will pay more.
 
This will slow the turn over of resale homes as well. You will have less young couples leaving the urban life for the suburbs.
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Living out here in the suburbs, I actually prefer a slowdown in population growth.
 
afransen said:
It's also a good point that homes under $400,000 are exempt, and homes under $500,000 are partially exempt. The rich will pay more.
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It's silly to assume that only "rich" people buy $500,000 homes. If you come to downtown Toronto you will discover that a townhouse can be priced at over half-a-million. If you want, I can show you loft condos at a little over 1,000 square feet selling for over $600,000. The owners are certainly not "rich." In many instances, living downtown means that many of these people do not have to use a car (which is supposed to be good, yes?).

So this threshold of exemption is one that will negatively affect people who would choose to live downtown. How many families will now turn away from living in the city and instead look at the suburbs with cheaper real estate costs and lower taxes?

Lesson: don't automatically assume that people who spend $500,000 on a home are rich. Typically, they are already in a very taxed bracket.
 
Lesson: don't automatically assume that people who spend $500,000 on a home are rich. Typically, they are already in a very taxed bracket.
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no they are in a very taxed bracket but do not take advantage of all their tax credits. :D
 
While it would make more sense to tax amounts greater than $500,000, I would rather they just tax all new homes.
 
Hydrogen said:
It's silly to assume that only "rich" people buy $500,000 homes. If you come to downtown Toronto you will discover that a townhouse can be priced at over half-a-million.
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I know $1 mil doesn't get you what you used to and I guess I'm old fashioned but I think if you're in a $600,000 house you're doing pretty well - or are at least the sort of person who gets him/herself into a lot of debt.

Anyway, this is about new homes it mostly doesn't apply to downtown anyway.
 
TJ O'Pootertoot said:
I know $1 mil doesn't get you what you used to and I guess I'm old fashioned but I think if you're in a $600,000 house you're doing pretty well - or are at least the sort of person who gets him/herself into a lot of debt.

Anyway, this is about new homes it mostly doesn't apply to downtown anyway.
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Then I'd have to say you are old fashioned if you think that getting a family home downtown will be priced the same as a house in the suburbs. Sure, there are plenty of suburban homes under $500,000. And if people don't want to pay this tax increase - or can't - they'll look for cheaper housing further out of the city. That will have an impact on the downtown area.

As for whether you think this tax applies to downtown, it most certainly does. It is an example of the a collision between two policy actions that will have an impact on downtown Toronto. Even a modest new townhome costs over $500,000. There have been initiatives attract more families to live downtown, and this tax addition will have an impact on that initiative. There are plenty of other new properties that are priced above $500,000, and they are not geared to the wealthy buyer. In other words, the location that dictates price is now also determining who pays this additional tax. It is not an income tax as you perceive it to be, but a tax that will affect certain areas more than others, and a tax that will shape the demographic of those areas.

As for affordability, you often need a double-income household to purchase a home. Again, it does not mean that buyers are wealthy. I'd suggest that you and afransen take a look at the downtown offerings so as to inform yourself and to dispel your allusions about downtown housing affordability.

You may not think that my post is relevant, but I raise the issue because this forum is called Urban Toronto and not "Deepest Mississauga" or "Way Up in Newmarket." This additional new home taxation will have a heavy impact on downtown Toronto.
 
Interestingly, new homes aren't subject to the provincial land transfer tax (not sure about the Toronto one), so this conceivably evens the playing field between resale and new homes. Is there anyone good at math that could figure out the land transfer tax and HST implications for a $600,000 home (resale vs. new)?
 
All land transfers are subject to the land transfer tax. First-time buyers get a rebate, but you're only a first-time buyer once.
 
well the houses downtown are over priced.

Paying 500-750k for a broken old 100 year old home is ridiculous.
 
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