F.A.Q.: Land Transfer Tax/Vehicle Registration
To my ward 33 constituents:
This is a long explanation, but I am hoping to touch on all questions asked. If you email further questions, we will get back to you as soon as possible. If you provide your mailing address in your reply we will note and file it in case there is a mailing after Council makes its decision.
Before the Provincial Government included what they called ‘Revenue Tools’ in the City of Toronto Act (COTA) last year, a great deal of fact-finding and formal third-party auditing of our finances took place. What the Province learned was that we are within normal range of efficient spending in all departments. The Province’s chosen firm, KPMG, even found that the downloaded social services in the City of Toronto were the most cost efficient in all of Ontario.
Essentially, the Province and City found that the City of Toronto has a revenue problem rather than a spending problem. Since current value assessment has placed hardship on large sections of Toronto, and since a large portion of our ratepayers are seniors living on fixed incomes and small investments, dealing with this problem entirely on the property tax base could be devastating. So, as a solution, the group of proposed taxes and user fees the Province included in the COTA are the same ones used by other cities as large as ours, throughout North America. Remember that Toronto is at least 100% larger than any other city in Canada, making a North America wide comparison necessary.
Out of the 8 taxes and fees COTA proposed, the two we’ve chosen to vote on, Land Transfer Tax and Vehicle registration, are not only the most efficient to implement but also disadvantage the least number of citizens. In addition, staff is proposing the same rebate to first time homebuyers as the Province uses in its own Land Transfer tax. On properties less than
$250, 000 for instance, a first time buyer would pay in the range of $225.
Regardless, it continues to be my responsibility as Budget Chief to find further efficiencies every year in the budget process to balance reductions in our overhead with investment in new services, parks and facilities that the people of Toronto continue to request. Last year my dedicated Budget Committee and finance staff found $80 million in efficiencies. That work will continue.
Currently, my position is as follows: My ward and the rest of the City are full of neighbourhoods made very valuable through the wonderful care of long time homeowners. Residents who invested as much as they could afford for homes years ago, due to the boom in property values, are now paying property tax on assessed values they never expected to see in their lifetimes. By diversifying our streams of revenue, Council would not have to tax these people, who have made our city great, right out of their homes. The vehicle registration fee would bring much needed investment to our roads but rather than gather these funds based on the unrealized value of your home, we would gather this investment based on the number of cars each household is putting on the road.
While the Provincial Government has committed to examining the issue of Provincial downloaded services and the lack of funding provided to Cities for their delivery, no upload will happen before our 2009 Budget at the earliest. While the official opposition party promises the same thing, election timing dictates that they would likely be unable to deliver an upload of costs any earlier. This is a key issue since the shortfall in social services transfer payments came to $73 million this year alone, an amount equivalent to your 3% property tax increase.
When the City’s consultant studied the COTA revenue tools in other Cities, they found that in Cities where these were implemented over time, that City’s reliance on the property tax stabilizes and is eventually reduced. We study Chicago carefully because it has a similar population at 2.8 million and a similar surface area. Today, after over 18 years of phasing in these revenue tools, an income tax to fund social programs, and finally, a sales tax to accommodate growth, Chicago’s reliance on property taxes is $750 million annually. Their property values and real estate market are as strong as or stronger than Toronto’s.
With no other form of direct taxation, Toronto’s reliance on property taxes is $3.2 billion annually. Our average property tax is lower than the average home in ANY GTA city and we strive to maintain that level since Torontonians contend with so many other urban challenges including skyrocketing assessments. My support for the Land Transfer Tax and the Vehicle registration fee stems from the fact that I cannot empty the pockets of our many senior homeowners, to meet the needs of those moving up the property ladder because they are growing in financial wealth or to generate the wealth of property speculators, not when the need for revenue is so clear in the City’s and the Province’s evaluation of our books.
Signed, Shelley Carroll
This is a long explanation, but I am hoping to touch on all questions asked. If you email further questions, we will get back to you as soon as possible. If you provide your mailing address in your reply we will note and file it in case there is a mailing after Council makes its decision.
Before the Provincial Government included what they called ‘Revenue Tools’ in the City of Toronto Act (COTA) last year, a great deal of fact-finding and formal third-party auditing of our finances took place. What the Province learned was that we are within normal range of efficient spending in all departments. The Province’s chosen firm, KPMG, even found that the downloaded social services in the City of Toronto were the most cost efficient in all of Ontario.
Essentially, the Province and City found that the City of Toronto has a revenue problem rather than a spending problem. Since current value assessment has placed hardship on large sections of Toronto, and since a large portion of our ratepayers are seniors living on fixed incomes and small investments, dealing with this problem entirely on the property tax base could be devastating. So, as a solution, the group of proposed taxes and user fees the Province included in the COTA are the same ones used by other cities as large as ours, throughout North America. Remember that Toronto is at least 100% larger than any other city in Canada, making a North America wide comparison necessary.
Out of the 8 taxes and fees COTA proposed, the two we’ve chosen to vote on, Land Transfer Tax and Vehicle registration, are not only the most efficient to implement but also disadvantage the least number of citizens. In addition, staff is proposing the same rebate to first time homebuyers as the Province uses in its own Land Transfer tax. On properties less than
$250, 000 for instance, a first time buyer would pay in the range of $225.
Regardless, it continues to be my responsibility as Budget Chief to find further efficiencies every year in the budget process to balance reductions in our overhead with investment in new services, parks and facilities that the people of Toronto continue to request. Last year my dedicated Budget Committee and finance staff found $80 million in efficiencies. That work will continue.
Currently, my position is as follows: My ward and the rest of the City are full of neighbourhoods made very valuable through the wonderful care of long time homeowners. Residents who invested as much as they could afford for homes years ago, due to the boom in property values, are now paying property tax on assessed values they never expected to see in their lifetimes. By diversifying our streams of revenue, Council would not have to tax these people, who have made our city great, right out of their homes. The vehicle registration fee would bring much needed investment to our roads but rather than gather these funds based on the unrealized value of your home, we would gather this investment based on the number of cars each household is putting on the road.
While the Provincial Government has committed to examining the issue of Provincial downloaded services and the lack of funding provided to Cities for their delivery, no upload will happen before our 2009 Budget at the earliest. While the official opposition party promises the same thing, election timing dictates that they would likely be unable to deliver an upload of costs any earlier. This is a key issue since the shortfall in social services transfer payments came to $73 million this year alone, an amount equivalent to your 3% property tax increase.
When the City’s consultant studied the COTA revenue tools in other Cities, they found that in Cities where these were implemented over time, that City’s reliance on the property tax stabilizes and is eventually reduced. We study Chicago carefully because it has a similar population at 2.8 million and a similar surface area. Today, after over 18 years of phasing in these revenue tools, an income tax to fund social programs, and finally, a sales tax to accommodate growth, Chicago’s reliance on property taxes is $750 million annually. Their property values and real estate market are as strong as or stronger than Toronto’s.
With no other form of direct taxation, Toronto’s reliance on property taxes is $3.2 billion annually. Our average property tax is lower than the average home in ANY GTA city and we strive to maintain that level since Torontonians contend with so many other urban challenges including skyrocketing assessments. My support for the Land Transfer Tax and the Vehicle registration fee stems from the fact that I cannot empty the pockets of our many senior homeowners, to meet the needs of those moving up the property ladder because they are growing in financial wealth or to generate the wealth of property speculators, not when the need for revenue is so clear in the City’s and the Province’s evaluation of our books.
Signed, Shelley Carroll
posted by Ward 33 @ 1:20 PM
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