In order to isolate the effect of the new tax from the rest of the winds hitting the real estate market, the study looked at the three kilometres of real estate on either side of Toronto's border with Peel, York and Durham Regions, where no new tax exists, from February to August. It found a deeper slide inside Toronto, where the new tax applies, than outside.
The new land-transfer tax, and a new tax for automobile registrations, caused a months-long political battle at city hall after council narrowly voted in July 2007 to delay the new taxes and Mr. Miller charged that the move put the city in a financial crisis. The new taxes were later approved in October.
Von Palmer, a spokesman for the Toronto Real Estate Board, said the study shows his group's warnings against the tax were right, and urged the city to repeal the tax.
"This validates what we've been telling people," Mr. Palmer said in an interview. "... The reality is that it has hurt the market."
