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Homeowners already pay enough

Bryan Tuckey
The Toronto Star
June 14, 2013

More than $1 billion is estimated to have been paid in 2012 toward the construction of growth-related infrastructure like sewers, roads and transit in the GTA.

What would you say if I told you that more than one-fifth of the cost of a new home goes to the government through various fees and charges?

The issue of home affordability poses a significant challenge for new home buyers in the GTA. So we commissioned a study by Altus Group, and released this past week, to help make sense of the variety of fees and charges collected by municipal, provincial and federal governments — and the impact of those costs on the affordability of a new home in the region.

The study looks at a variety of fees and charges in six municipalities across the GTA — Town of Oakville, City of Brampton, City of Markham, Town of Bradford-West Gwillimbury, Town of Ajax and the City of Toronto.

The rates can vary in each municipality, so the report lists the value of fees and charges like development charges, planning and building permit fees, parkland dedication, property and land transfer taxes, mortgage insurance, HST and more. To calculate fees and charges based on the land or home value, the average price of a new lowrise or a highrise home in that municipality was used.

On average, the total government charges and fees amount to one-fifth the cost of a new home. In one case, they represent 27 per cent of a new home’s cost.

In dollars, the average adds up to $118,400, or 23 per cent, on a new single-detached home. For a new highrise home, it’s 20 per cent or roughly $ $64,400.

Here’s why it matters: right now, municipalities across the GTA are looking at how they are going to pay for critical infrastructure like roads, bridges, sewers and public services that will be used by not only new residents, but existing residents as well.

Increasing development charges and other government fees is not the answer.

These facts show that new homebuyers across the GTA are already doing their fair share to support the development of essential public infrastructure.

It is estimated that in 2012 alone, the industry, new home buyers and businesses contributed more than $1 billion toward the construction of growth-related infrastructure like sewers, roads and transit in the GTA through development charges paid to municipalities.

The largest government fee on new homes is development charges, according to the study. Since 2004, for the municipalities studied in the report, development charges have increased between 143 per cent and 357 per cent. As I write this, many municipalities across the GTA are proposing further increases to their rates.

Everyone needs and wants the public services these government fees and charges fund. But it’s time we all contact our government representatives to tell them how important it is to keep the rates affordable, so that future generations of new home buyers will one day be able to put these services to good use.

Posted on Tuesday, June 25, 2013 at 02:27PM by Registered CommenterElaine in | CommentsPost a Comment | References1 Reference

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