Taxes nail costs to new homes in GTA
May 17 2018
Rising government taxes, fees and charges now total $186,000 on the cost of a new detached house in the Greater Toronto Area (GTA) and an average of $121,000 to the price of a new high-rise condo, a new study suggests.
The study Government Charges and Fees on New Homes in the Greater Toronto Areawas conducted byAltus Group for the Toronto-based Building Industry and Land Development Association (BILD).
“Some of these costs, such as development charges, are increasing far faster than the rate of inflation, squeezing prospective new homebuyers out of the market,” said Dave Wilkes, BILD president and CEO, in a press release.
Wilkes said the building and land development industry agrees that new homebuyers should pay their fair share of these costs. However, the report shows that these charges have increased across the GTA between 236 per cent and 878 per cent since 2004, far exceeding inflation and average wage increases over the same period, according to Wilkes.
“Combined, development charges and HST make up nearly 80 per cent of all government fees applied to new homes,” added Wilkes. “With affordability being a significant concern in GTA markets, these types of increases are not sustainable.”
In order to keep home ownership a reality in the GTA, BILD recommends that all levels of government must consider the role that taxes and fees contribute to the cost of a new home.
New home buyers in Canada’s other most-expensive market are also paying a lot in government fees and taxes. In Vancouver the average new home carries nearly $78,000 in government charges, according to a study from the Fraser Institute.