Year of the condo loaded with surprises

Bob Finnigan

Looking back over a year’s worth of columns, the titles reveal an eventful 12 months with the big themes being affordability (read taxes), sustainability (read green) and “condomania.”

At the beginning of 2007, I held the most bullish forecast but was still projecting a 10 per cent decline in new-home sales. Turns out all the analysts were wrong and I was just the least inaccurate.

When all is said and done, new-home sales will actually be at least 10 per cent higher than in 2006, so I had the quantum right but not the direction.

I also forecast a rebalancing of the market toward a 60/40 lowrise-to-highrise split compared with 55/45 in 2006. I expected to see as much as one-third of the highrise sales being recorded in the 905 regions, particularly Mississauga and Markham, but increasingly in other suburban communities.

Wrong again. Highrise sales as a proportion of the market not only increased in 2007, there were more highrise than lowrise homes sold for the first time ever. And 80 per cent of the new condos were sold in the city of Toronto. The year 2007 will go down as the year of the condo.

As far as affordability goes, this was the year that Toronto homebuyers got hit with the “Miller Bite” in the form of the city’s land transfer tax on top of the provincial tax.

If there is anything good that came out of this, it’s that buyers of new homes spoke up for themselves, resulting in some favourable last-minute amendments.

On the positive side, Ottawa reduced the GST again, which on big-ticket items such as new homes will have a positive impact on housing affordability, at least outside the city of Toronto.

Ontario Expands Land Transfer Tax Refund Program

First-time buyers of resale homes to benefit from new tax measure

The McGuinty government is giving all first-time homebuyers a break on land transfer tax by proposing to expand the Land Transfer Tax Refund Program to include purchases of resale homes, Finance Minister Dwight Duncan announced today.

“Expanding this Land Transfer Tax refund is an important part of our government’s commitment to helping Ontarians buying their first home,” Duncan said.

Effective midnight tonight, first-time buyers of resale homes, as well as newly constructed homes, would be eligible for a refund from the provincial government of up to $2,000 of the Land Transfer Tax paid.

The expanded Land Transfer Tax Refund Program for First-time Homebuyers is part of a package of new tax initiatives announced in the 2007 Fall Economic Outlook and Fiscal Review that would provide $1.4 billion in provincial tax relief for business and people over three years. The government is making strategic investments in people, communities and infrastructure to strengthen Ontario’s economic advantage and help manufacturers and other sectors challenged by current economic conditions.

For more information please visit: http://www.gov.on.ca