Two weeks ago, the FMTA board responded to an article in the Toronto Star where a landlord-group labelled pro-tenant measures related to the HST "unfair."
April 13, 2010
To The Editor
Re: Landlords call Province's HST Measures Unfair
Landlords are playing a shell game with the facts to justify cutting back their maintenance costs and neglecting the needs of tenants in Toronto and across the Province.
Landlords are exaggerating the projected impact of the HST. Operating costs for a rental building in Toronto are less than 50% of rent charged as per the Ministry of Housing and Municipal Affairs and thousands of rent increase applications. The biggest cost is Municipal taxes and that is not subject to the HST. Other significant costs are management and staff salaries also not subject to HST. Items purchased are subject to HST, but in reality, they are already subject to both Provincial and Federal Sales tax - so there is no real change there.
The only serious impact of the HST is on the cost of heat and hydro. It's important that the Province not include the HST on these essential home costs. Approximately 20-25% of Toronto's tenants will start incurring this cost on July 1 of this year. What the Government is doing will prevent landlords from taking an extra increase in 2011 based on the HST, and then benefiting from a higher guideline in 2012 partly based on HST inflation.
What landlords are conveniently not saying is that the 2010 guideline (2.1%) is about triple the rate of inflation. Property tax for multi-residential buildings will go up less than 1% in 2010 in Toronto. In fact, over 128,000 rental units have recently experienced a drop in taxes of more than 2.5%. A further study of guideline increases over the last 25 years will show that the guideline has almost always met or exceeded the rate of inflation. And how about just a few years ago where tens of thousands of tenants were given extra permanent rent increases for a temporary spike in gas costs.
Short memories can be useful for landlords, but not looking at the whole picture is misleading.
Federation Metro Tenants Associations