Toronto’s runaway house prices could threaten the city’s economy if even the wealthiest 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 under present 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 market is “principally being driven by move-up buyers leveraging the equity in their existing residences,” David Madani, senior Canada economist at Capital Economics, said.
Source: Huff Post Business