The housing situation in Toronto and the rest of the province has been very tight for years. Lots of would-be buyers chasing the proportionally smaller number of new houses being built. This drives prices higher, but no matter how much of the final price is the builder’s profit margin, the government gets nearly four times as much on every new house sale:
The National Post previously reported that at least a third of a new home’s sticker price in Ontario was comprised of taxes, but an updated report, courtesy of the Canadian Centre for Economic Analysis (CANCEA), now puts the figure at 35.6 per cent.
(It gets even better when it comes to affordable housing — but more on that later.)
The Increasing Tax Burden on New Ontario Homes: 2024, which was commissioned by the Residential Construction Council of Ontario and released by CANCEA on Tuesday, is eye-opening for reasons beyond the fact that a compendium of largely superfluous taxes and production levies has reached 35.1 per cent of the final purchase price of a new home in the city of Toronto. It’s 35.5 per cent in the outlying 905 region, and 34.5 per cent in Ottawa.
The report needed only 16 pages to elucidate how bureaucratic machinations aren’t just gouging prospective homebuyers, but homeowners, too — especially the estimated 1.2 million whose mortgages, according to the Canada Mortgage and Housing Corporation, are due for renewal in 2025.
Read closely enough, CANCEA’s report makes a strong argument that, effectively, Canadians work for the government rather the other way around.
For example, CANCEA’s report demonstrates that 70 per cent of aforesaid taxes on new homes “consist of direct fees on the home, such as DC (development charges) and other fees”.
“For homes priced at $450,000,” which aligns with median income, “… the tax burden rises sharply to 45.2 per cent,” says the report, which also notes that economics often force developers to build smaller units that are insufficient for families.
