We hear so much about new home affordability eroding in Toronto and the Greater Toronto Area, and how difficult it is for first-time buyers to realize homeownership – but I wonder how many consumers realize that the fees imposed by our governments contribute significantly to the cost. Recently, BILD commissioned a report by Altus Group to examine government fees, taxes and charges on new homes in the GTA, and it turns out they are among the highest in North America.
For the average new single-family home, these charges add $222,000 to the cost, which on a per-unit basis is nearly double those in other Canadian urban areas, and three times higher than on average in six U.S. metropolitan areas. Government-related fees in the GTA add around $124,000 to the cost of an average high-rise condo suite, which is approximately 30 per cent higher than in other Canadian urban areas, and one-and-a-half times those in six U.S. metropolitan areas. To say the charges here are disproportionate is an understatement.
When it comes to government, transparency is important. Canadians have the right to know exactly what we are paying in the way of government-imposed fees, and why. All three levels of government have the responsibility to help hard-working Canadians, yet the existing new home scenario is counterproductive. At least in the U.S., the government does not impose sales tax on new homes, whereas here in Canada, that figure ranges from 5 to almost 15 per cent before applying rebates. Even worse, our charges here continually increase as new fees and development charges are imposed, making this scenario difficult to resolve.
Despite these extreme charges, the new home market in Toronto and the GTA has been, and remains robust. Unless our governments at all levels take a more realistic look at charges on new homes, there is no telling how long this can last. To read BILD’s news release, visit https://bit.ly/2lX8RY5