Re: “That &@#! tax,” Jan. 13.
I read that the property tax can not be rolled into the mortgage and that if it were, the interest costs would almost equal the tax over an amortization of 25 years.
But this is exactly what happens de facto. Let’s say a property cost $100,000 and the purchaser must make a 25 per cent down payment to obtain a mortgage. But assume that the purchaser is capable of making a larger down payment of 35 per cent, thus reducing the mortgage at the outset. However, the looming property transfer tax forces the purchaser to direct that money away from the mortgage down payment to the insatiable government coffers, resulting in a larger than necessary mortgage.
This is not my area of expertise, but I do recall having to part with $11,000 in tax that I would have used to decrease the amount I borrowed. Yet we’re told in the article that the government can ill afford to part with this revenue stream it being so firmly entrenched now.
To which Winston Churchill has said: “We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
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