Fractional Ownership News

Fractional real estate taxes 'threaten Ontario tourism'

Earlier this month, Progressive Conservative MPPs demanded that Ontario's minister of finance reconsider imposing the land transfer tax on fractional ownership properties.

Local representative Norm Miller, who is also the PC finance critic, referred to the plan as a threat to the tourism industry and economic development and the plan being to apply tax retrospectively & only adds insult to injury and can only be viewed as a tax grab. "I am very concerned by this government’s regressive tax scheme to apply land transfer tax to fractional ownerships. That is why I personally asked the Finance Minister, Dwight Duncan to review and reconsider the policy" continued Miller.

Miller said Canadian fractional ownership developments represent the “next generation of transient tourism accommodation,” and is a system that has helped reinvent many older fractional resorts and lodges, particularly in Muskoka. 

The local MPP said he has already hosted a meeting between the Ministry of Revenue and several local fractional property owners. He said he has also spoken with Minister Duncan directly about the issue. He really didn't seem to know very much about it" said Miller. "I think it's possible that the change was made without his knowledge." For its part, the ministry responsible for administering the land transfer tax said last week that it's always been its policy to collect the tax on fractional ownership cottages.

"Usually with something like this we get a heads up from the government or through the AMO (Association of Municipalities of Ontario), but I had literally never heard of this before (last week)" said Muskoka Lakes Township mayor Susan Pryke.

Lake of Bays, Corbett Cove and other fractional developments in the Mussoka Lakes area have all seen a boom in fractional ownership real estate sales over the past decade, and the land transfer tax will likely hit more property owners there than in most other municipalities in Ontario.

Pryke called the application of the land transfer tax to fractional ownership properties a creative interpretation of the existing rules. "No one is voting on this, they've just decided they're going to do it" said Pryke. "If the province wants to do it, that's their right. What I find difficult is that it's retroactive. "If you're going to do something new you start from that date and move forward so those who purchase the properties can be prepared. I think retroactive taxation of any nature isn't right"

27/08/2009