Here's What's Driving Up Home Prices in the GTA
Fees, taxes, and government charges account for nearly a quarter of the price of a new home in the Greater Toronto Area (GTA), a new report finds.
“Some of these costs, such as development charges, are increasing far faster than the rate of inflation, squeezing prospective new home buyers out of the market,” said president and CEO of the Building Industry and Land Development Association (BILD) Dave Wilkes.
Let’s talk dollars and cents: these costs add $186,000 to the price of an average new single family home and $121,000 to the cost of an average high-rise apartment in the GTA.
The Government Charges and Fees on New Homes in the Greater Toronto Area report was released on April 30. It’s a follow up to a similar report released by BILD in 2013.
Development charges are levied by municipalities on new development to offset capital costs related to the increased need for services such as water, roads, sewers, and emergency services.
BILD says the industry supports the need for new home buyers to pay their fair share of these costs.
But the report shows that these charges have increased across the GTA between 236 per cent and 878 per cent since 2004, far outstripping inflation and the average wage increases over the same period.
“Combined, development charges and HST make up nearly 80 per cent of all government fees applied to new homes. With affordability being a significant concern in GTA markets, these types of increases are not sustainable,” said Wilkes.
In order to keep the dream of home ownership a reality in the GTA all levels of government must consider the role that taxes and fees contribute to the cost of a new home, according to BILD.