Toronto's mayor wants luxury home buyers to 'chip in more'

Toronto’s mayor wants buyers of luxury homes to pay more tax.

Currently, luxury property purchasers in the city, those whose homes are valued at $3 million and more, pay what is known as the Luxury Homes Tax. The rates on these properties were established in 2023 and vary from 3.5 per cent for a residence that is valued between $3 and $4 million to 7.5 per cent for one that is $20 million and up.

Last year, only 1,164 home buyers, just under two per cent, paid this levy, which brought in $138.2 million in revenue for the City of Toronto.

Next week, Mayor Olivia Chow will be presenting a motion to the Executive Committee that looks to increase the graduated Luxury Homes Tax rate by 0.90 to 1.10 per cent. It is projected that these new rates will bring in an additional $13.8 million (starting April 1), with an anticipated total of $152 million in revenue for the city in 2026.

Chow’s proposal to revise graduated Municipal Land Transfer Tax rates for high value residential properties containing at least one, and not more than two, single family residences, calls for a 4.40 per cent tax rate for those who buy a residence that is valued between $3 and $4 million up to 8.60 per cent for purchasers of homes that cost $20 million or more.

“In uncertain times, as the cost of living rises, families need a break. These funds will help save families $1,200 on groceries and transit by funding the school food program and not raising TTC fares three years running,” she said in a release.

“People who can afford a five or ten million dollar property can chip in more.”

Chow went on to say that this proposed tax increase, which would go into effect on April 1, will give “everyday taxpayers and families” a break in her 2026 budget during a time when there is a long-standing affordability crisis in the city.

She added that this tax increase would allow the city to continue building more affordable rental homes, and creating more free spaces - like library Sunday hours and more recreation for youth.

The Executive Committee is set to meet next Tuesday.

Source: CP24