Toronto Mayor’s Plan to Increase Luxury Home Tax Approved by City Council
Toronto Mayor Olivia Chow’s proposal to raise the land transfer tax on luxury homes selling for over $3 million has been given the green light by the City Council. This move aims to generate an additional $14 million in revenue for the city in 2026, with luxury home sales already contributing $138 million annually.
Under the approved plan, the tax rates will vary based on the property value: starting at 4.4% for homes up to $4 million, increasing to 5.45% for homes up to $5 million, and reaching 8.6% for homes exceeding $20 million.
While some critics argue that taxing the wealthy could have negative repercussions, Mayor Chow defends the decision, emphasizing that it affects only a small percentage of Torontonians who are among the wealthiest property buyers.
Supporters of the tax view it as a way to implement progressive taxation and ensure that those in need receive necessary assistance. However, opponents, including the Toronto Regional Real Estate Board, have expressed their disapproval and called on Premier Doug Ford to intervene, though Ford has indicated that any changes would need to wait until the next municipal election.
Amendments to the luxury tax proposal include exploring potential relief for first-time homebuyers and directing the tax revenue towards transit and housing initiatives. The city also seeks to reduce its reliance on the land transfer tax by requesting a portion of the HST from the provincial government.
The details of the 2026 budget, slated for release in January, will incorporate the new land transfer tax, which is scheduled to come into effect in April.