Could mandatory energy audits and the MLTT be in place by Spring 2016?
Mandatory Energy audits and the MLTT: two good reasons to
buy or sell now!
Buyers and sellers should both be concerned with two pending
agenda items on the Provincial Government review list: the potential implementation of mandatory
green energy audits and the potential for a Municipal Land Transfer Tax (MLTT). Both of these items will add significant cost
and complexity for buyers and sellers, if implemented.
It is not just the
cost of the audit!
One portion of the disastrous Liberal Green Energy Act 2009
was shelved but is being revisited and would call for mandatory home energy
audits prior to listing a property for sale.
While it is hard to disagree with the intent of the program, we feel
that making the program mandatory is overkill and will cost Ontarians thousands
and thousands of $$.
The cost of the audit itself would probably be fairly
reasonable, between $350 and $500. The
real cost is in the updates necessary to score a better energy rating and the
lost market value for homes with low energy scores. Many seniors who have been in their homes for
a long time could well be hit with big energy upgrade costs or a loss of their
capital nest egg.
Upgrade costs would include costly windows, doors,
electrical, lighting, heating/cooling systems, insulation and appliances and
would run in to some major money.
Sellers would have to get all this done prior to selling and
would have no choice but to pass along the costs to buyers.
Do you want to pay $5,700-$12,200-$20,200
in land transfer tax?
The MLTT has been in existence in Toronto for 7 or 8 years
now and generates some $350-$400M annually in tax revenue. While city officials in Ottawa have indicated
they have no interest in implementing the MLTT here, it is clear that the
Provincial Government is all about finding new “revenue tools” and Ottawa has
some huge projects to finance ( LRT and Ottawa River clean to name but two). A large part of the funding for these
projects is expected to come from the province.
The city could be forced in to implementing a Toronto like
MLTT in order to fund committed projects without drastically raising property
taxes.
The MLTT would add the equivalent of the provincial land
transfer tax to every purchase and increase the cost of buying a new home
significantly. The total land transfer
tax burden on a future purchase would be as follows:
$300,000 purchase: $5,700 in provincial and municipal land
transfer tax
$500,000 purchase: $10,475
$700,000 purchase: $20,200
So while nothing is for sure, never trust the shifting winds
of politics and politically feasible methods of taxation. (especially with a majority
government!) Both of these
measures could be in place by this time next year, so if you need another
reason to be buying or selling this year…this might be it!
Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692
oasisrealty@rogers.com
oasisrealtyottawa.com