🔭 PLATFORM VIEW: Mark Saunders’ plan to “Save Homebuyers Over $20,000”
🔗 LINK: marksaundersfortoronto.ca/news/homebuye…
🔧 DOABLE? No.
💰 COSTED? Of course not.
✨ OVERALL: ⚫️ (Zero out of five)
I think it’s fitting to end this PLATFORM VIEW feature here, with Mark Saunders’ plan to “save homebuyers over $20,000.”
We spent a lot of time during this campaign talking about Olivia Chow’s lack of specifics on property taxes. We did not spend anywhere near enough time talking about the lack of any kind of detail offered by conservative candidates like Saunders when it comes to proposals like this one.
As many of the high-profile left-wing candidates in this race have done their best to offer detailed costing behind their pals, a lot of right-wing candidates have gotten away with offering pure fantasyland proposals that would blow giant holes in the city budget.
Take this one, by Saunders, who begins by taking a shot the requisite shot at Chow and property taxes:
Olivia Chow’s plan is to increase property tax by at least 25%. That means an extra $2000 dollars per year on the average home price. We know 25% is her minimum, we don’t know what her maximum tax increase will be because she won’t tell us.
Several important fact-checks here. We do not “know” that 25% is Chow’s minimum property tax increase. It is not. Every percentage point increase in residential property taxes raises about $40 million. A 25% increase would increase the operating budget by $1 billion. Chow’s promises do not add up to anywhere close to $1 billion in operating expenses.
I am also not sure how a property tax adds to the average home price, or what Saunders’ figures are based on. Property taxes are an ongoing cost, like home insurance or hydro, that needs to be factored into ownership. On a home with Toronto’s average assessed value of $695,268 (homes have not been reassessed since 2016), each 1% property tax increase works out to about $33.20 per year more on the property tax bill. A hypothetical 25% property tax hike — which, again, Chow has not proposed — would work out to about an $830 annual increase, not $2,000.
Nevertheless, Saunders has cooked up a scheme to save homebuyers more money:
By waiving the municipal land transfer tax (MLTT) on property sales with a closing cost of $1.3 million or less for first-time homebuyers, this plan will massively reduce the government fees that buyers face. For the current average purchase price in the City, this policy will save first-time homebuyers approximately $22,500.
Let’s do some rough math on this. A 2020 report gives us some numbers on first-time buyer home purchases in Toronto from 2016 through 2019. The lowest was 15,487 in 2018. The highest was 21,129 in 2016.
We’ll take the low-end number, though presumably, one aim of Saunders’ policy would be to increase the number of first-time home buyers, so the total could be a lot higher.
The average home price in Toronto these days is, according to TRREB, $1,197,021. Plug that into the City’s handy Land Transfer Tax Calculator, and a first-time buyer buying a home at that price these days — factoring in the City’s current first-time buyer exemption for homes valued up to $400,000 — faces a land transfer tax bill of $15,940.00.
Multiply that by 15,487 transactions and we get a hit to the City’s operating budget of somewhere in the ballpark of $247 million.
To put that into context, that’s roughly equivalent to the entire annual operating budget for the Toronto library system.
Maybe — hopefully — things would be different if Saunders were the actual frontrunner, but it is more than a little ridiculous that Chow faced dozens of ridiculous questions about whether she’ll raise property taxes 20%, or 25%, or fifty bazillion percent, while Saunders faced few questions about whether he’s prepared to cut the entire library system to give buyers of million-dollar homes an extra tax break.
The assumption that conservative-leaning candidates are more fiscally responsible should be in the scrap head after this campaign. Go back over the 29 entries in this PLATFORM VIEW series and you’ll find lots of costed proposals from left-leaning candidates. They weren’t always perfect — I often had questions — but at least there was an attempt. And then you’ll find a lot of uncosted and/or unworkable plans from the conservative side. What a waste.
PLATFORM VIEW was a daily(ish) feature by City Hall Watcher on Substack Notes.