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There are also some provinces, such as Alberta, that don’t even bother with a provincial land transfer tax, according to the C.D. Howe Institute.

Ontario government officials considering extending the tax say some municipal partners have raised concerns regarding the adequacy of existing revenue tools to meet infrastructure needs.

“In 2014 at the (association of municipalities of Ontario) conference, I was asked whether I would consider looking at municipal revenue tools as part of the Municipal Act review. I gave the shortest answer possible, yes. We are currently reviewing the Municipal Act. No decisions have been made,” Ted McMeekin, the minister of municipal affairs and housing, said in an emailed statement.

As part of the review of the Municipal Act, comments will be accepted until Oct. 31

The City of Toronto put its tax in place two years after the Ontario government extended it the powers to do so. OREA said over five years 38,227 Toronto housing transactions were not completed because of the tax.

Benjamin Dachis, a senior policy analyst with C.D. Howe, said if the plan goes through it will lower real estate sales across Ontario. He said Toronto sales were 16 per cent lower than they would have been otherwise following the new tax.

“We also saw lower prices equal to if not greater than the amount of the tax,” said Dachis, who expects the same impact elsewhere across the province. “People know it’s not just this transaction subject to land transfer taxes, it’s the one after that and the one after that.”

While Toronto’s booming housing market might need a bit of a cooling, the same can’t be said for all of Ontario. “Land transfer is not a major factor but it can make a difference at the margin between yes or no (to buying),” said Benjamin Tal, deputy chief economist with the Canadian Imperial Bank of Commerce. “Most of Ontario’s real estate market is not booming.”

gmarr@nationalpost.com

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