The City of Toronto is facing a massive budget shortfall, and nobody is talking about this.
We have all heard the news that year over year sales for Toronto Real Estate have declined. Dramatically. Each month. Especially with condo sales.
The City of Toronto collects a Land Transfer Tax each time a property changes hands. This also happens for commercial properties.
What happens when fewer properties change hands? Less revenue for the City.
Is the city spending less in anticipation of this? No.
Land Transfer Tax collected is roughly 5% of Toronto's budget.
According to TRREB June 2024 the City of Toronto had sold an accumulated dollar volume for all residential homes of $7,220,554,220.
As of June 2025 that accumulated dollar volume is $6,877,858,542.
Since Toronto Land Transfer Tax is charged on the value of a home when homes sell for less and less of them sell and that accumulated volume is negative $342,695,678 and we are half way through the year, I think it should be obvious there is going to be a massive shortfall in Land Transfer Tax revenue and some bells should be going off.
Another aspect to this is not just the Land Transfer Tax, but the City of Toronto also collects Development Fees.
With the massive decline in Condo builds and new homes being built on infill lots, the city is not collecting as much in Development Fees as anticipated. To the left is an image for the latest City of Toronto Development Fees for Non-Rental Residential Development. The Spadina Subway Extension has a 30 year loan on it. If we collect less development fees because developers are not completing/starting projects, that loan still needs to be paid.
On top of that The FIFA World Cup is facing a $40 million budget shortfall. Originally the FIFA world cup was supposed to cost $30-$45 million, but final approval is $380 million. Click the below images for the links to the articles.
On top of all that the City may lose $30 million in federal funding because it didn't vote to upsize all residential lots for 6-plex zoning in the June 25, 2025 meeting. Ward 25 had no representation at that Toronto Council meeting. 9 Wards out of 25 approved the measure, while leaving the rest to "opt-in" at a future date and there will be a lot of pressure on all councillors to approve the measure or lose $30 million in funding from the Federal Government. See article HERE on this topic.
I will be going into this topic further in depth, pros and cons and looking for feedback from Ward 25 residents.
The City has some large budget challenges coming up and won't be able to rely on Provincial and Federal Levels for filling those holes. Mayor Chow has increased property taxes 24% since being elected, how high will the tax increase for 2026 be?
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