Thursday, April 19, 2007

Property Tax - Good, Bad, Ugly?

EDMONTON Real Estate Board is rallying against a proposed property-transfer tax. EREB has concerns that the new tax will reduce affordability by increasing the cost of an average Edmonton house by $4,000.

The Minister’s Council on Municipal Sustainability, released a report last month which recommended that the province authorize municipalities to collect six new or expanded taxes and levies including a property-transfer tax. This proposed property transfer tax is still in discussions so the tax rate has not been decided.

Carolyn Pratt of EREB has anticipated the tax at 1%.

“This is a home-buying tax,” EREB president Carolyn Pratt said today in a news release. “It is patently unfair to ask home buyers to pay for municipal services which would benefit the entire city.”

Mayor Stephen Mandel, a member of the Minister’s Council, said he would support such a tax for Edmonton.
“We’re trying to find ways to take pressure off the property-tax payer...”

Economist Mel McMillan said such a tax may not affect prices as it would be the seller responsibility.

“Normally, prices are negotiated to the maximum that the buyer is willing to pay.”