See how much government fees increase new homes prices in the Greater Toronto Area

There’s been a lot of focus recently on the lack of supply and strong demand driving up home prices in the Greater Toronto Area, but there are other factors to consider: government fees, taxes, and charges.

The Building Industry and Land Development Association recently announced that government fees, taxes and charges add $222,000 to the average new single-family home in the GTA, and $124,000 to a new condo unit, according to an Altus Group study. 

“The facts demonstrate that government fees, taxes and charges play a significant role in eroding housing affordability in the GTA,” says Dave Wilkes, President and CEO of BILD. “These costs are unsustainable and BILD calls on all governments to bring certainty and transparency for new home buyers.”

The study compared the GTA to Ottawa, Vancouver, Montreal, and Calgary, as well as major U.S. cities, including San Francisco, Miami, Boston, New York City, Chicago, and Houston. Altus Group found that buyers in the GTA are paying some of the highest government costs in North America (based on total tax burden). 

The average total government fees, taxes, and charges on a new single-family home in the GTA is three times higher per-unit than the six U.S. cities included in the study, and nearly double compared to other urban areas in Canada. For condo units, the average total government costs in the GTA were 1.5 times greater than the U.S. cities and 30% higher than other Canadian cities. 

Looking just at municipal development charges, which are meant to go towards infrastructure development to accommodate population growth, GTA builders are paying double what builders in other Canadian and U.S. cities are paying for single-family homes, and 60% more for condo units.  

“The Building Industry and Land Development Association supports the concept that growth should pay for growth,” says Wilkes. “But clearly the costs associated with building a sewer or adding a sidewalk cannot be that much different in Montreal, Ottawa or Calgary. GTA municipalities should not be adding disproportionate costs on new home buyers as a mechanism to keep property taxes low, especially when the infrastructure benefits all.”

While everyone deserves affordable, quality shelter - a place to call home - building homes is still a business. So when the government adds $222,000 in costs, you better believe the builder is adding that to the price of the home. 

Wilkes seems to be implying that increasing property taxes and lowering development fees, taxes and charges is the answer. What do you think?