By Matthew Van Dongen, Reporter
It turns out even the theoretical idea of a new tax is enough to attract an angry crowd to Hamilton City Hall.
Last year, council asked for a report on potential “revenue tools” — specifically, options other than property tax hikes — to help the cash-strapped city with increasingly dire budget pressures.
The resulting report, which went to councillors Wednesday, gave information on three different tax scenarios: special parking levies, alcohol and cigarette taxes and a local version of a land transfer tax that staff suggest could “reduce dependency on property taxes.”
There were no recommendations in the report, no councillor pitched emotion to consider new taxes and none could be adopted unless the province changes existing laws.
But that didn’t stop dozens of real estate industry workers and homeowners from packing council chambers Wednesday carrying signs declaring “No to a municipal land transfer tax” and “Homes not hurdles.” The idea circulated far and wide online ahead of the meeting, and some councillors reported being inundated with emails.
The province already applies a one-time land transfer tax to the sale of each home as part of closing fees, with the amount based on the purchase price.
Toronto is the only city in Ontario currently allowed to apply a second, municipal land transfer charge. Hamilton’s report suggests a local version of that tax could yield close to $117 million a year — which, in theory, could allow for property tax cuts.
Just the idea of exploring such a new land transfer tax spurred an uproar among builders and realtors.
However, A local land transfer tax would be “counterproductive” to the goal of making housing more affordable — and push more home-seekers away from Hamilton, said Julie Sergi, chair of the Cornerstone Association of Realtors, which commissioned a survey ahead of Wednesday’s meeting that suggested a majority of city residents opposed such a tax.
Sergi noted that for an average home sold in Hamilton, this tax might cost the buyer closer to $12,000 — a cost that cannot be rolled into a mortgage.
Michael Collins-Williams, CEO of the West End Home Builders’ Association, speaks against the idea of a local land transfer tax.
Cathie Coward The Hamilton Spectator
Regional builders’ association head Michael Collins-Williams argued it would show a “complete and utter disconnect from reality” for council to consider a new tax amid a cratering number of new home builds in Hamilton.
In a phone interview, Tory MPP Donna Skelly also vowed to oppose any request to change the law to allow for a municipal land transfer tax.
“I would be absolutely opposed and do anything I could to prevent it from going any further,” she said.
The Flamborough-Glanbrook MPP, who recently challenged the city to account for its use of 2024 provincial dollars on homelessness, suggested council should look first at its spending before seeking permission for new taxes.
“They’ve got to rein it in.”
Councillors received the information report without taking any further action on any of the theoretical tax options Wednesday. Several vowed to oppose the land transfer tax idea if it is ever formally pitched.
But some councillors also bristled at the province's criticism of the city, arguing that a lack of support from Ontario is responsible for many of the municipalities' fiscal woes. Coun. Maureen Wilson noted that cities in Ontario have to come up with more cash for critical needs in social housing and long-term care than elsewhere in Canada, where those costs are covered by provincial governments. Ontario downloaded costs for social housing, among other services, to city taxpayers more than 20 years ago.
“It is beyond rich for our local (provincial) representatives to admonish this council for the hard decisions we are forced to make as a result of provincial decisions, provincial inaction and provincial downloading,” added Coun. Danko.
Coun. Tammy Hwang, the city’s representative to the Association of Municipalities of Ontario, noted the group is pushing the province to discuss a “new fiscal framework” for cities.
“The current way of how we are funding investment and growth on the backs of property taxpayers is just completely unsustainable.”