Mayor Olivia Chow’s proposal to increase the municipal land transfer tax (MLTT) on homes selling for over $3 million is stirring political discord in Toronto yet promises minimal financial return. Her motion aims to levy an additional tax point on these luxury properties, purportedly easing fiscal pressure on working-class families by generating necessary revenue. Last year, only 2% of home-buyers were affected, contributing $138 million to the city’s income.
However, Toronto’s real estate market has cooled significantly, with just 182 homes over $2 million sold in 2024, casting doubt on future revenue projections. The city relies heavily on volatile real estate taxes, a practice dating back to David Miller’s administration as mayor in 2008. Critics warn of diminishing returns, especially as property values decline. Chow’s new tax is expected to raise just $13.8 million next year against a $17 billion budget, a negligible increase.
This proposal appears politically motivated, targeting high-value homeowners during an election year. Chow faces challenges, including justifying a recent tax hike and defending infrastructure decisions amidst controversy. While the luxury tax aims to showcase her social awareness, its negligible financial impact does little to address broader economic issues confronting Toronto.