— We take our content seriously. This article was written by a real person at BREL.
If 2023 wasn’t enough of a real estate rollercoaster, the arrival of 2024 brought some immediate and important changes:
- An increase to Toronto’s vacant home tax
- A new luxury land transfer tax
- The Trust in Real Estate Services Act which aims to provide better protection for real estate consumers
- Restrictions on how homes that are ‘Exclusively Listed’ for sale can be advertised
Read on for all the details….
Increase to Toronto’s Vacant Home Tax
In 2022, Toronto introduced a vacant home tax, intended to increase the supply of housing by discouraging empty homes. Effective January 1, 2024, the vacant home tax increased from 1% to a whopping 3%!
The Vacant Home Tax is calculated based on the Current Value Assessment and occupancy of the previous tax year, meaning that homes deemed vacant in 2023 will pay 1% in 2024, and the 3% tax will apply to homes that are vacant in 2024 and be payable in 2025.
IMPORTANT: Every homeowner in the city of Toronto must declare the occupancy of their home by February 29, 2024 – if you fail to do so, your home will be deemed vacant and the vacant tax will be levied. You can complete your 2023 occupancy declaration here.
Want to know all the details? Here’s our blog about the Toronto Vacant Home Tax.
A New Luxury Home Tax
Effective January 1, 2024, Toronto has a new luxury land transfer tax for homes valued at more than $3 million. Here are the new graduated land transfer rate brackets:
| Value of the Home | Toronto Land Transfer Rate |
| Over $3,000,000 and up to $4,000,000 | 3.5% |
| Over $4,000,000 and up to $5,000,000 | 4.5% |
| Over $5,000,000 and up to $10,000,000 | 5.5% |
| Over $10,000,000 and up to $20,000,000 | 6.5% |
| Over $20,000,000 | 7.5% |
Remember: Toronto’s land transfer tax is a graduated scale, so if you’re buying a $4.5 million home, you’ll pay:
- 0.5% of the first $55,000
- 1% of the value between $55,000-$250,000
- 1.5% of the value between $250,000 to $400,000
- 2% of the value between $400,000-$2,000,000
- 2.5% of the value between $2,000,000-$3,000,000
- 3.5% of the value between $3,000,0000-$4,000,000.
- 4.5% of the value between $4,000,000-$4,500,000
Of course, you still have to pay the provincial land transfer tax. Here’s how the luxury land transfer tax changes the cost of buying a home in 2024:
| Land Transfer Tax | In 2023 | In 2024 |
| Ontario | $98,975 | $98,975 |
| Municipal | $98,975 | $118,975 |
| Total | $197,950 | $217,950 |
Yep, that’s an extra $20,000!
The Trust in Real Estate Services Act (TRESA)
The legislation that protects consumers in real estate transactions was updated (at last) and came into effect on December 1, 2023. The Trust in Real Estate Services Act (TRESA) is a beast – with all sorts of implications for buyers, sellers and their REALTORS.
In short, TRESA:
- Provides better consumer education – there’s a new RECO Information Guide that must be given to all buyers and sellers
- Sets out new rules around representation – As a buyer or seller, you can now be:
- Represented by a REALTOR as a Client; or
- Choose to represent yourself as a Self-Represented Party (SRP)
- Sets out new rules around brokerage representation – There are now two types of brokerage representation to help navigate situations where an agent or brokerage represents more than one party with competing interests in a transaction (multiple representation):
- Brokerage Representation – when the brokerage and all its agents represent you
- Designated Representation – when one or more of a brokerage’s agents is your designated representative.
- Greater disclosure requirements – Sellers and their agents must now disclose everything they know about a property.
- Open bidding wars – While the blind binding wars of the past are still permissible, there are new rules guiding what a Seller and their agent can share during a multiple offer or bidding war – and open auctions are now legal in Ontario
- Forms, forms, forms – There are a whole bunch of new forms. Yippee.
- Changes to the Code of Ethics and greater penalties for misbehaving REALTORS
Read our (extremely detailed) blog about TRESA and what it means for Buyers and Sellers.
New Rules for Homes Listed for Sale ‘Exclusively’
An ‘exclusive listing’ occurs when a seller enters into a listing agreement with a brokerage, but the listing does not appear on the MLS. The listing agent (and everyone in their brokerage) has the exclusive right to find the Buyer.
As of January 1st, 2024, homes must be listed on the MLS (and available to be shown to prospective buyers) within 3 days of public marketing – which means you won’t be seeing as much ‘Coming Soon’ advertising anymore. In the past, some (not very scrupulous) REALTORS used ‘secret’ or ‘pocket listings’ as a way to build their businesses – but it hurt the integrity of the real estate data and created an unequal playing field for buyers who were shut out of seeing these ‘secret’ homes for sale. It also often hurt the sellers who didn’t benefit from marketing their home to a greater number of buyers.
What’s Next?
Of course, 2024 is guaranteed to be filled with more real estate news and surprises:
- What’s going to happen to interest rates? We’re already seeing decreases in the interest rates of fixed-rate mortgages at the big banks, and many economists expect the Bank of Canada will begin lowering the overnight rate as early as April 2024. Two years of interest rate increases have taken a brutal toll on the Toronto real estate market, and I think I speak for all homeowners, buyers and sellers when I say ENOUGH!
- How high will Toronto’s property taxes go? It’s no secret that the City of Toronto greatly depends on the municipal land transfer tax to fund itself, and with 2023 home sales reaching a 23 year-low at almost 50% of the usual volume, the city needs $$. As of writing, Council is debating a property tax increase of between 10.5-16.5%. For the average homeowner, that will amount to about an extra $1 day.
- How will financing rules and regulations change? As more people renew their mortgages at higher interest rates, we may see changes to the stress test or amortization periods.
- What’s going to happen to prices in Toronto? The average home price in the GTA declined by 5.4% in 2023. Have we reached the bottom?
- Will first-time home buyers be further incentivized to buy? It’s hard being a first-time homebuyer in Canada, and even harder in the Greater Toronto Area because of the high prices. Will 2024 finally bring relief for real estate newbies?
- What’s going to happen to inflation, immigration and employment, and how will that affect real estate?
