Toronto’s red hot real-estate market has helped deliver an unexpected boost to the city’s bottom line.
The city will officially announce its year-end fiscals on Monday and it’s expected the surplus will be about $290 million, which is roughly double the $140-million surplus expected.
Coun. Denzil Minnan-Wong spoke to CBC News on Saturday and said much of the extra money comes from the land transfer tax, which is generating extra revenue as Toronto's real-estate market continues to surge.
Minnan-Wong cautioned that although he opposed the land transfer tax in the past, it might be too soon for the city to consider removing it.
“We have a quite a substantial debt,” he said. “The last administration spent $700 million for streetcars and didn’t have a way to pay for it. Until we have some way to pay for those large expenditures, it’s hard to make an argument to eliminate the land transfer tax."
Coun. Sarah Doucette said the city shouldn't have made cuts to services during the budget process if they knew a surplus was coming.
"We keep cutting and cutting and we were told this year we had to cut services because we don't have the revenue and yet we find out we do have the revenue and we do have a surplus," she said.
"So why are we threatening to cut the programs that people want and people need?"
The land transfer tax charges purchasers on a sliding scale base on the value of the property. A house priced at $500,000 would result in $5,700 in land transfer taxes.
First-time purchasers are eligible for a rebate of $3,725.
Mayor Rob Ford has said he hopes to phase out the tax in increments by 2014.