More Info: Control the Costs That Governments Add to New Homes

Governments can affect the cost of a new home in the GTA by doing these three things

By Dave Wilkes, President & CEO of BILD for the Toronto Star

Controlling or reducing housing taxes is crucial for lowering new home costs in the Greater Toronto Area (GTA). Currently, government fees and taxes constitute 25% of a new home’s cost in the GTA, with municipal fees alone accounting for over half that amount – among the highest in North America.

BILD’s 2024 Municipal Benchmarking Study quantifies the fees and charges that municipalities add to the cost of a new home. In the GTA, fees, taxes and charges from all levels of government account for almost 25 per cent of the cost of a new home for the new homebuyer. Municipal fees and charges are a significant portion of that. According to the study, municipal fees rose by an average of $42,000 per unit on low-rise developments and $32,000 on high-rise units since 2022. On average, municipal fees now add $122,387 to the cost of a condominium and $164,920 to the cost of a single-family home in the GTA.

The study also found that Municipal Fees Rose by $42,000 Per Unit on a Low-Rise Development, and $32,000 on a Unit in a High-Rise Development and that since the 2022 Municipal Benchmarking Study:

DCs rose by a low of 6%, to 74%, growing significantly faster than the cost of building infrastructure between 2022 and 2024.
Caps introduced on parkland dedication were largely offset by increases in land values relative to the 2022 report and significant increases in development charges across all municipalities studied;
Total municipal fees per unit ranged from approximately $102,000 in Bradford West Gwillimbury to a high of just over $195,000 in the City of Toronto (Toronto) on a low-rise development. The average fee charged on a unit in a low-rise development is almost $165,000;
Total municipal fees per unit ranged from roughly $55,000 in Milton to a high of $157,643 in Vaughan on a high-rise development. The average fee charged on a unit in a low-rise development is roughly $122,000;
Development charges (“DC”), parkland dedication and community benefit charges (“CBC) made up the lion’s share of these fees; and
DCs rose by a low of 6%, to 74%, growing significantly faster than the cost of building infrastructure between 2022 and 2024.

Addressing these fees and charges can reduce housing costs and are entirely within the power of governments to do so.

To calculate the cost of Federal and Provincial HST – click here.

To calculate municipal (Toronto) and provincial (Ontario) Land Transfer taxes – click here.

Tell the provincial government to work with municipalities to control the costs they add to new homes.

Click here to return to the #DoSomething landing page