Charges on building new homes in Ontario have surged by 1000% in some places

Lofty development charges are among the principal factors builders say are stifling home construction across the GTA, and it’s hard to argue that the sharp increases in these fees over the years — nearly 1,000 per cent since 2010, in some parts of the region — are not having any effect.

Groups like the Building Industry and Land Development Association (BILD) and newly-formed Coalition Against New-Home Taxes (CANT) have been imploring leaders to minimize these fees, and fully axe HST on new houses and the land transfer tax, which is often highest in Ontario (depending on home price).

“For every dollar of taxes cut, this group of developers would cut their prices dollar for dollar to ensure that savings are passed on to homebuyers,” CANT said of its 18 members in August.

Stats recently shared across social media do indeed show some pretty devastating levies against those adding new housing supply, like $190,000 on a semi-detached home or $160,000 on a townhome in Vaughan.

One Ontario economist who has been particularly involved in the growing conversation on the topic shared a table of how development charges have changed in cities and towns around the Toronto area over the last 15 years, identifying which locales have seen the highest surges.

Toronto proper, of course, came out on top, with a 993 per cent increase in development charges on single-family dwelling units between January 2010 (when the amount was just $12,910) and September 2024 (now $128,229). It is worth noting that the price of the typical home in the region as of last month is $1,074,425, some 270 per cent more than in  Jan. 2010 (about $400,000, depending on which data you look at).

These fees have increased by a staggering 40 per cent in the city so far this year, while cities like Burlington lowered theirs to “encourage additional housing builds.”

Other municipalities have seen less extreme jumps, but higher fees.

In a report on new home sales released Thursday, BILD writes that the market is “struggling with deep structural issues that have made the cost to build too high,” and that “a key component of those costs are the excessively high government taxes and fees, which add, on average, $355,000 to the cost of an average single-family new home in the GTA.”

Then there is the fact that material, labour and other building costs have escalated faster in T.O. than almost anywhere else in the world lately.

It’s been enough to inspire some stakeholders to demand not just lessened development charges, but none at all, to help ease our stubbornly high home prices, as these costs naturally get passed on to consumers.

Some residents, though, feel Ontario’s developers likely have deep enough pockets to cut costs elsewhere (salaries, perhaps) and offer homes at more reasonable prices, regardless of changes in the cost to build. With such a glut of existing condos already on the market, the push for so many more also feels a little less urgent, though the hope is that more supply translates to lower home prices.