I’m not alone in believing that the City of Toronto is dangerously addicted to its land transfer tax, revenues from which rise (and will eventually fall) with the fortunes of the city’s property boom. Former City Manager Peter Wallace told council over and over again it needed to see the LTT for what it is: a windfall that will eventually dry up.
In this article for Spacing Magazine, I argue the using rising LTT revenues to subsidize low property tax rates funding the operating budget (ephemeral costs such as salaries and benefits) is a mistake. The LTT is actually the best means the city possesses to extract public benefit from the property boom, and therefore its fruits should be spent on things that last: public infrastructure and facilities. My proposal: over ten years, gradually shift LTT revenues from funding the operating budget to funding the capital budget.