Toronto city budget enjoying substantial boost from commercial segment
Toronto’s land transfer revenue for Q1 2018 exceeded expert predictions by $30.7 million, a development that acting chief financial officer Joe Farag attributed to “a number of (commercial) transactions.”
“The revenue simply was much greater than anticipated,”Farag stated, as quoted by The Toronto Star.
The Toronto city council has projected over $800 million in land tax revenue by the end of 2018, a sharp departure from the modest estimates of years past.
JLL Canada manager of capital markets research Gaurav Mathur predicted that the city will almost certainly exceed that target, as demand for Toronto’s commercial, industrial, office, and retail spaces remains high.
“That’s based on the investor interest we see — there is a lot of money in the commercial real estate market looking for product to buy, which means the market is quite strong,” Mathur stated.
The looming legalization of recreational cannabis will also impel growers and sellers to seek real estate in much of Toronto, Mathur added.
“It’s a new industry opening up and will have a pull going forward.”
Toronto’s increasing dependence on the land transfer tax has raised concern among several city councillors, which warned of potential troubles should the market find itself in a slump. Farag assured that a rapid decline in the city’s real estate market is unlikely at this point, however.
“Our projections are that we’re going to meet budget, and the budget for this year is I believe $817 million,” Farag said. “It’s really early in the year to tell you what that number will be, but we think we’ll be able to meet it.”