Toronto’s runaway house prices could threaten the city’s economy if even the top 1 per cent of earners find themselves priced out of the market, as is now happening, the Bank of Montreal is warning.
BMO Chief economist Douglas Porter crunched the numbers and found that someone earning $225,000 a year — right at the cutoff point of the top 1 per cent — will not be able to buy an average-priced single-family home in Toronto.
That’s despite the fact this earner would be considered rich in accordance with existing tax laws. Anyone in Ontario earning above $220,000 pays a combined hefty top marginal tax rate of 53. 53 per cent.
Toronto’s housing sale is “predominantly being driven by move-up purchasers leveraging the equity in their existing houses,” David Madani, senior Canada economist at Capital Economics, said.
Source: Huff Post Business