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Mayor Olivia Chow wants Torontonians who can afford homes over $3 million to pay more in land transfer taxes in 2026.
Changes proposed by Chow Tuesday would see the so-called luxury homes tax rate increase on houses purchased from $3 million to more than $20 million, with the change in rate growing as homes get more expensive. The luxury homes tax is a higher land transfer tax for multimillion dollar properties approved in 2023.
The mayor says the proposed increases will rake in an extra $13.8 million in 2026, bringing the projected total revenue from the luxury homes tax up to $152 million. As the city shifts full on into budget deliberation mode, the mayor made the announcement before she brings the proposal to executive committee next week.
The city’s budget chief, Coun. Shelley Carroll, has already said the fiscal document will be “leaner” in 2026.
The mayor is pitching this proposal as a way to protect other city-funded affordability measures.
“I’m proposing that the wealthiest two per cent of property buyers, just half of one per cent of Toronto residents, contribute a bit more,” Chow said outside her office at city hall. “So we can invest in service families rely on.”
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The mayor says the funds will help cover things like school nutrition programs and a recently announced third annual freeze on TTC fares.
Speaking to reporters at city hall after the mayor’s announcement, Carroll said “every penny counts” as she works towards the budget that will be made public in January.
“We’ve done all we can in terms of doing efficiencies, investing only where we need to invest and economizing in other places,” she said. “And every little bit of revenue in a city that doesn’t have a lot of streams of revenue is very very helpful to those struggling with affordability.”
How the tax rate could change
In 2024, the proposed tax increase would have impacted 1,164 home sales, according to the mayor.
Here’s a breakdown of how the tax rate will change for different properties.
- Homes valued between $3 million and $4 million would see a 0.9 per cent change in rate, to a total 4.40 per cent.
- Homes valued between $4 million and $5 million would see a 0.95 per cent change in rate, to a total 5.45 per cent.
- Homes valued between $5 million and $10 million would see a one per cent change in rate, to a total of 6.5 per cent.
- Homes valued between $10 million and $20 million would see a 1.05 per cent change in rate, to a total 7.55 per cent.
- Homes valued above $20 million would see a 1.10 per cent change in rate, to a total 8.6 per cent.
Toronto real estate board opposes move
The Toronto Regional Real Estate Board (TRREB) has never liked the municipal land transfer tax and doesn’t support hiking it, said Jason Mercer, TRREB’s chief information officer.
He says the tax can have negative impacts even when it’s applied to wealthier homebuyers.
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Murtaza Haider, executive director of the Cities Institute at the University of Alberta, says high costs and economic uncertainty from U.S. tariffs are causing a slowdown in sales for Canada’s housing market.
“Even at the higher end of the housing market, if a larger upfront tax precludes people from buying in that space, they’re essentially not moving out of, say, more mid-range houses that could be available for people with other housing needs,” Mercer said in an interview with CBC Toronto.
In a news release, TREBB called on the city to increase a land transfer tax rebate for first time homebuyers instead.
