Thursday, July 9, 2009

Tax the Home Buyer Buffet Continues in Halton

Open Letter to Gary Carr,

Chair of Halton Region

From Peter Gilgan, CEO Mattamy Homes

Dear Chair Carr:

Politics is your business, building homes is mine.

For more than 30 years now, together with many hundreds of Mattamy employees and many thousands of skilled trades-people, we’ve built well over 13,000 award-winning family homes in Halton Region. My company has helped some families get their start in life and others move up to the home of their dreams.

Through the years, I’ve stayed out of the limelight. But I can no longer remain silent.

Halton Region proposes to raise taxes on new homes by $8,000. That’s in addition to your tax increase of $8,000 over the last 12 months and the $9,000 tax increase that Oakville is currently proposing.

If this increase goes through, in just five years, the combined Halton Region and Town of
Oakville new home tax will have increased from $24,981 to $63,813 without any increase in the services provided.

That’s a tax hike of 155 per cent. Nothing justifies an increase that large in so little time.

In fact, the $8,000 tax hike is so extraordinary, Council had to by-pass the Ontario Development Charge legislation enabling such taxation.

How can you justify new home taxes that are twice as high as in Durham? It just doesn’t add up.
Another tax increase of $8,000 per new home far exceeds the costs of new growth.

I agree, existing taxpayers should not pay taxes to support growth and new development. But, it is irresponsible to suggest that without another tax increase on new homes, rates will go up for existing taxpayers. You may well decide to hike property taxes. But it will not be because homebuilders and new homeowners aren’t prepared to pay their fair share.

If this tax increase is approved, it will put the dream of new home ownership beyond the reach of many average families. It will mean that younger couples and families who grew up in our community will have to move somewhere else to afford a new home. And it will mean that seniors and “empty nesters” looking to down size to a new home will have to move away from their friends, kids and grandchildren.

Finally, whatever might be said about the need for funding development, this new tax increase
was proposed last year using out-of-date, pre-recession budget assumptions and estimates
.

Governments around the world, businesses and families have all had to readjust to the new economic reality.

Shouldn’t the Region of Halton do the same?

Let’s think twice about increasing taxes on new home owners.

Sincerely,
Peter E. Gilgan
CEO, Mattamy Homes

Additional Facts about the New Tax

7 comments:

oakvillehomes said...

For too long the Halton taxpayer has been paying for the developers profit margin. It is now time to make them pay the going price if they want to do business instead of having retirees having their taxes increased. Development charges are a levy not a tax. For more, see www.oakvillehomes.wordpress.com

oakvillehomes said...

For too long, the Halton taxpayer has paid for the development in Halton and it is now time for the development community to pay their share. To have retired taxpayers foot the extras is not right, especially in today's economy. If they want to build, let them foot the bill. For the story on Mattamy, visit www.oakvillehomes.wordpress.com

Elegant Homes in West Toronto said...

It is not the tax I disagree with. Municipalities need to tax (lot levy) new construction to fund future needs.

Toronto is around $12,000 per unit, woefully low compared to others.

Halton is in Mattamy's article.

It is the speed of the increases that the market cannot absorb.
If the homes cannot be built there will be no jobs, no spin off spending etc.

If One builder cannot make a profit, do not be fooled, others cannot make a profit either.

I can point at many that are over priced for the market and location and are still for sale, unsold 3 years later.

The cost per unit exceeds the market, even now.

oakvillehomes said...

Yes, your right that Toronto is way too low and suffering for it. The speed of increases may be too fast (especially in this climate) but, at some point in time they have to catch up to reality. Mattamy's Gilgan didn't become a billionaire selling homes at a reasonable rate, just a rate that the public accepted. Maybe reduce the profit and absorb the increased Development Costs to ensure taxpayers aren't stuck with the bill. With Gilgan once living in a $45 million dollar , 48,000 sq. ft. home doesn't make me feel that he's paid his share of the infrastructure costs.

Elegant Homes in West Toronto said...

and I am sure that someone is paying suitable land ownership taxes on that property..
and someone had the foresight and took the risk to invest 30 and 40 years ago in raw farmland that was unsuitable for financing for decades until it could be developed.
Yes these people deserve profits for their risk taking and employment opportunities.
Would you wish it differently?

oakvillehomes said...

In terms of risk, yes someone had to do it but since they bought up farmland, the tax structure they worked under really didn't hurt them. The rent from farmers more than paid the taxes etc and they had the write offs in regards to their investment (I work with some farmers). They are smart investors as can be seen by Gilgan being a Billionaire... Calculated risk with a lot of safety net built in. We need people with foresight to plan ahead and get things going but, not on my back as a taxpayer. I have limited funding and capital as a retiree and increased taxes won't help me get ahead, nor will Mattamy et al in their demand for reductions. All comes down to who gets what in the end - profit or the shaft. The small guy recently has been getting it too much - executive benefits, etc. But, I wouldn't have had my home unless someone invested in the land and built, so that point is very correct.

Elegant Homes in West Toronto said...

Sir,

No one is asking you, as an existing homeowner, taxpayer and pensioner to fund anything but our joint shares in General Motors.

Buying Farmland now is hundreds of thousands per acre is in no way offset by the $100 or 2 per acre for farming rights.

Tax is paid based on the agricultural use but Market Value assessment makes that a Moot point.

Long Term planning by Municipalities is lacking because we do not mentor and attract the best and brightest to be civic leaders. We have elections and we continue to elect what we deserve.