Eglinton-Lawrence councillor Mike Colle is seeking support for a provincial tax on speculation in the housing market.
At the Dec. 15–16 city council meeting, he’ll be presenting a motion, seconded by Willowdale councillor John Filion, that Toronto ask the Ontario government to introduce a Home Speculation and Home Flipping tax.
The tax would “help stop the extreme increases in home prices driven by land speculators and home flippers in Toronto, who are purchasing multiple homes and flipping them for huge profits ,” the motion says.
The rapid escalation of home prices is making it impossible for most Torontonians to afford homes, Colle said in a Dec. 8 statement.
The Toronto Regional Real Estate Board reported in November home prices in the city rose by 21.7 per cent in the psst 12 months, making the average selling price for a resale house or condominium $1.16 million.
An estimated 25 per cent of all property sales in Toronto are to land speculators now.
“Given that these out-of-control housing prices are fueled by real estate speculators and home flippers (“investors”) who are buying multiple properties other than their primary residence, it’s time for the Ontario Government to stop out-of-control housing prices by re-imposing a Land Speculation Tax,” according to Colle’s motion.
Such a move has precedents, even for a Progressive Conservative government.
“When Toronto was facing a similar problem in the early 1970s, Ontario Premier Bill Davis implemented a 50 per cent Land Speculation Tax on people buying and selling homes that were not their principal residence,” the motion states. “This tax is credited with slowing the extreme increase in property values in Toronto in the 1970s.”
Davis’s tax on land profits, excluding principal residences, was introduced in April, 1974 during a period of quickly climbing housing prices, but was later reduced to 20 per cent. It was scrapped altogether in 1978 after house prices stabilized with single-digit annual increases.