Ontario cities need to wean themselves from the habit of hiking fees on new builds in order to subsidize low property tax rates for current residents
In the city of Kitchener in Southwestern Ontario , buyers of new homes are the only locals who must pay directly to build a swish athletic facility that will be open to everyone.
But cities started to enjoy that revenue stream too much. They began to gorge on development fees, a flow of money that allowed politicians to keep property taxes low. Who was going to complain? Future owners of homes are often people who don’t yet live in the city and can’t vote. It’s the city-building equivalent of thatabout an innovation in how to raise government revenue: taxing foreigners living abroad.
Since 2014, economy-wide inflation has amounted to less than 30 per cent. But the development charge for a detached or semi-detached home in Toronto has surged 396 per cent, to nearly $140,000. Row-houses and multi-unit residences such as condos have lower development charges, but these have also risen enormously.
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