Slideshow shadow

RE/MAX – Spring market trends report 2014

April 21, 2014 in Blog by WinnipegREALTORS

RE/MAX – Spring market trends report 2014 with mention of the Manitoba Land Transfer Tax.  Click here for the report. 

See pages 18 & 19 of this report for information specific to Winnipeg, Manitoba.

Real estate market becoming balanced – Winnipeg Free Press – April 16, 2014

April 17, 2014 in Blog by WinnipegREALTORS

Winnipeg Free Press article from April 16, 2014 with mention of the Manitoba Land Transfer Tax.  Click here for the article.

Winnipeg’s real estate market balancing out – Winnipeg Sun article – April 16, 2014

April 17, 2014 in Published Articles on LTT by WinnipegREALTORS

Winnipeg Sun article from April 16, 2014 with mention of the Manitoba Land Transfer Tax.  Click here for the article.

Manitoba provincial budget relief for younger first-time home buyers is overdue – Real Estate News – March 14, 2014

April 9, 2014 in Blog by WinnipegREALTORS

Real Estate News article from March 14, 2014 about the Land Transfer Tax.  Click here for the article.

Public Opinion on the Manitoba Land Transfer Tax – Probe Research Omnibus

December 27, 2013 in Blog by WinnipegREALTORS

Public Opinion on the Land Transfer Tax

Prepared for WinnipegREALTORS®

 TABLE OF CONTENTS

1.0 RESEARCH METHODOLOGY AND BACKGROUND
2.0 RESEARCH RESULTS
2.1 Public Support for Adjusting LTT Rates
2.2 Exempting First-Time Homebuyers from the LTT
2.3 Incidence of LTT Payment

 

1.0          RESEARCH METHODOLOGY AND BACKGROUND

This city-wide Omnibus survey was designed and conducted by Probe Research via telephone interviews taken between September 19th and September 28th, 2013 with a sampling of 600 adults residing in Winnipeg.
With a sample of 600 one can say with 95 percent certainty that the results are within ± 4.0 percentage points of what they would have been if the entire adult population of Winnipeg had been interviewed. The margin of error is higher within each of the survey’s population sub-groups.
Modified random digit dialing was used to ensure that all city adults would have an equal opportunity to participate in this Probe Research Inc. survey. Minor statistical weighting has been applied to this sample to ensure that age and gender characteristics properly reflect known attributes of the city’s population. All data analysis was performed using SPSS statistical analysis software.

 2.0 RESEARCH RESULTS

2.1 PUBLIC SUPPORT FOR ADJUSTING LTT RATES

Winnipeg homeowners were asked if they believe that the rates at which the Land Transfer Tax (LTT) is charged should be adjusted to reflect current housing prices.
As the graph below illustrates, currently 65 percent of all Winnipeg adults – and a similar proportion (63%) of Winnipeg home owners – advocate for this change. Among citizens who support adjusting the LTT (65%), this includes 31 percent who strongly agree that it should be changed to reflect current market realities and an additional 34 percent who somewhat agree with this statement. Slightly fewer than three-in-ten Winnipeg adults, on the other hand, do not agree with the idea of adjusting LTT to reflect contemporary housing prices (28%, including 17% who strongly disagree and 11% who somewhat disagree). Five percent of respondents were unsure or did not respond.

Draft Omnibus Report for 

Citizens who are more likely to support adjusting the LTT include:

  • Residents of the Core area (77% strongly/somewhat agree, compared to just 57% among those in southeast Winnipeg and 60% in southwest Winnipeg).
  • Younger adults aged 18-34 years (82% strongly/somewhat agree, versus 69% among those aged 35-54 years and 46% among those aged 55 years and over). 

 

Looking at the year-over-year comparison among homeowners, it is clear that the proportion of Winnipeg homeowners who agree that LTT rates should be modified has increased substantially in the past year. Today, 63 percent of homeowners strongly or somewhat agree that the current LTT regime should be changed, compared to just 50 percent among this same population in December 2011.

 Draft Omnibus Report for

 2.2 EXEMPTING FIRST-TIME HOMEBUYERS FROM THE LTT

Respondents were also asked if they would support an exemption to the LTT for first-time homebuyers. There is a great deal of backing for this idea among the general population, as three-quarters of those surveyed would support waiving the LTT when a first-time homebuyer purchases a home (74%, including 49% who strongly support the idea and an additional 25 percent who moderately support it). One-in-five citizens, on the other hand, are against an exemption to LTT for first-time buyers (21%, including 10% strongly oppose and 11% moderately oppose). Four percent of those surveyed were undecided.
As the graph below illustrates, the proportion of citizens who favour an exemption for first-time homebuyers is virtually similar to the proportion of homeowners who support this idea (75% of current homeowners strongly/moderately support, versus 74% among the general population).

 Draft Omnibus Report for

Notable variations among respondents include:

  • Younger adults aged 18-34 years are more likely to be in favour of exempting first-time homebuyers from LTT (81%, versus 68% among those aged 55 years and over).
  • Residents of the Core area were among those Winnipeggers most likely to favour a first time purchase exemption (82%), whereas those living in northwest Winnipeg were significantly less likely than other citizens to support this idea (63%).

 The following graph shows that among Winnipeg homeowners, support for the notion of exempting first-time homebuyers from paying LTT is virtually unchanged over the past two years (72% strongly/moderately support in 2011 and 75% in this current sounding).

 Draft Omnibus Report for

2.3 INCIDENCE OF LTT PAYMENT

Overall, one-half of all Winnipeg adults (51%) report that they have paid LTT at some point in their lives, with 43 percent indicating that they have never paid LTT and six percent not recalling if they have paid this tax. As the graph on the right shows, the proportion of Winnipeg homeowners who have paid this tax has increased slightly since 2011 (from 55% to 59% today).

 Draft Omnibus Report for

Notable variations among respondents include:

  • Middle-aged citizens are more likely to have paid LTT at some point in their lives (61% among those aged 35-54 years, compared to 44% among those aged 55+ years and 43% among those aged 18-34 years).
  • The incidence of paying LTT is positively correlated to respondents’ level of education (59% among those with a university or college degree, compared to 36% among those with a Grade 12 education or less) and household income (63% among those earning $100,000 or more annually and 60% among those earning $60,000-$99,999/year, versus just 36% among those earning $30,000-$59,999/year).

 

For more information on this research project, please contact:

Probe Research Inc.
Suite 850 – 125 Garry Street
Winnipeg, Manitoba R3C 3P2 Attention: Kevin McDougald, Research Director
Tel.: (204) 926-6565
Fax: (204) 926-6566
E-mail: kevin@probe-research.com 

 

Getting a foot in the door – Winnipeg Free Press – December 7, 2013

December 20, 2013 in Blog by WinnipegREALTORS

Winnipeg Sun article from December 7, 2013 about the Land Transfer Tax.  Click here for the article.

 

Tax unfair to home buyers – WinnipegREALTORS® – July 5, 2013

July 8, 2013 in Published Articles on LTT by WinnipegREALTORS

Real Estate News article on Land Transfer Tax from July 5, 2013. Click here for the PDF.

 

Land transfer tax has become a cash grab, realtors say – Winnipeg Sun – June 1, 2013

June 6, 2013 in Published Articles on LTT by WinnipegREALTORS

Winnipeg Sun article from June 1, 2013 about the Land Transfer Tax.  Click here for the article.

A Taxing Situation

May 31, 2013 in Video by WinnipegREALTORS

Spare Us Mercy – Winnipeg Free Press – May 28 – 2013

May 31, 2013 in Published Articles on LTT by WinnipegREALTORS

Editorial piece from the Winnipeg Free Press of May 28, 2013 discussing the NDP government and its thoughts and actions on taxation.  Click here for the article.

Beliefs of the Federal Gov’t vs. the Provincial Gov’t

May 14, 2013 in Video by WinnipegREALTORS

Compare Price Increases

May 14, 2013 in Video by WinnipegREALTORS

Public Opinion on Land Transfer Tax – Probe Research – Dec. 2011

July 12, 2012 in Published Articles on LTT by WinnipegREALTORS

Survey conducted by Probe Research on behalf of WinnipegREALTORS® published December, 2011. Click here for PDF.

Manitoba’s Shameless Tax Grab

May 14, 2012 in Video by WinnipegREALTORS

Kill Monster Cash Grab – Winnipeg Sun – Sept 21, 2011

September 21, 2011 in Published Articles on LTT by WinnipegREALTORS

Tom Brodbeck of the Winnipeg Sun article on the “Monter Cash Grab” that is the Provincial Land Transfer Tax. Click here for PDF.

Fighting For Manitoba Homebuyers – WinnipegREALTORS® – Sept. 21, 2011

September 21, 2011 in Published Articles on LTT by WinnipegREALTORS

WinnipegREALTOR® Press Release of September 21, 2011 urging voters to ask their candidates where they stand on the Land Transfer Tax. Click here for PDF.

Manitoba Land Transfer Tax is Too High

June 10, 2011 in Video by WinnipegREALTORS

Tax punitive to home buyers – WinnipegREALTORS® – Apr. 8, 2011

April 8, 2011 in Published Articles on LTT by WinnipegREALTORS

Winnipeg Real Estate News article on Land Transfer Tax from April 8, 2011. Click here for the PDF.

View the growth in Land Transfer Tax (2000-2010) – WinnipegREALTORS® –

April 8, 2011 in Published Articles on LTT by WinnipegREALTORS

For those who like to pour over data, check out this table demonstrating the growth in Land Transfer Tax from 2000 to 2010. Click here for PDF.

Frequently Asked Questions – WinnipegREALTORS®

April 8, 2011 in Published Articles on LTT by WinnipegREALTORS

Land Transfer Tax Questions and Answers

 

1. What is the Land Transfer Tax?
a. This is a Home Buyers’ Tax levied by the Provincial Government when homebuyers become the new registered owners of the property they just purchased. This levy happens with each property transfer meaning someone could pay this levy a number of times throughout their lifetime of purchasing properties.

However many times you may be required to pay it, you do not derive any additional benefits or put additional burdens on public services (except for minimal administrative costs) as compared to someone that does not move at all.

In Manitoba’s case it already has a title registration fee of $70 which is not included in the land transfer tax.

 

2. What is Manitoba’s Land Transfer Tax rate?
a.
Value of Property Rate
On first $30,000 0.0%
On Next $60,000
(i.e. $30,001-$90,000) 0.5%
On Next $60,000
(i.e. $90,001 – $150,000) 1.0%
On the Next $50,000
(i.e. $150,001 – $200,000) 1.5%
On amounts over $200,000 2%**
**This rate came into effect in 2004

 

3. How do these rates compare to other jurisdictions?

a. It can be said that the exemption from 0- $30,000 where there is no charge and the .5% charged on the $30,001 – $90,000 or the 1% from $ 90,001 – $150,000 would not be considered out of line with other provinces. However, the 2% tax rate charged for any amount over $200,000 is the highest one in the country.

In February 2009, 56% of home sales went for prices over $200,000 so the highest land transfer tax rate in the country applies. With the progression over the years of higher home values provincial land transfer tax revenues have skyrocketed. Even  comparing February 2009 MLS® home sales with the same month a year ago, revenues went up 29%. From February 2000 to February 2010 the revenue has increased 600 per cent.

 

4. When was the Land Transfer Tax implemented?

a. It was introduced in the late 1980’s when the average sale price of a home in Winnipeg was $81,611. This average sale price now has nearly tripled since then. 

The average home sale price in February 2010 was $228,000. Not surprisingly, back when it did come into effect the vast majority of home sales were under $200,000. 

 

5. Have there ever been any adjustments to the Land Transfer Tax or indexing to account for the higher property values over the years? 

a. Yes, there has been one adjustment and that was to increase the highest rate of 1.5% in 2004 to 2% for any amount over $200,000. As a result, the 2% rate is the highest land transfer tax rate in the country. b. As for indexing, nothing has been done since the land transfer tax was brought in. 

The Canadian Association of Accredited Mortgage Professionals (CAAMP) in a 2007 study showed Manitobans in the first nine months in 2007 in comparison to 1997 paid a 358 per cent increase in land transfer taxes. 

 

6. Can the Land Transfer Tax be included as part of financing in a new mortgage?

a. No, it is another closing cost that must be paid before you can register your new property. 

b. Making the land transfer tax even more difficult to accept and manage to come up with the required levy amount based on the sale price of a property purchased is Manitoba’s low disposable income relative to the rest of the country. In the 2009 Manitoba Check-Up Report done by the Chartered Accountants of Manitoba, it shows Manitobans had the lowest disposable income (income after taxes) yet our government has the highest land transfer tax in the country at 2% for any amount over $200,000. 

c. Manitoba’s disposable income is more than $2,000 less than the Canadian average.

 

7. Does Manitoba provide any exemptions on the Land Transfer Tax?

a. There are a few such as farm land when it is bought with the intended purpose to continue using the land for farming. One important exemption, not provided in this province, where in a number of other provinces it is included as part of the land transfer tax, is a first-time home buyer exemption. In British Columbia, firsttime buyers do not have to pay any land transfer taxes on any amount up to $425,000.

 

8. What do Land Transfer Taxes mean to the province in terms of revenues? 

a. In 2009, the land transfer tax revenue was $49.6 million. $44.8 million was collected in 2008; a 17.2% increase from 2007. Based on the lack of indexing and the adoption in 2004 of the highest land transfer tax rate in the country of 2% starting at the lowest price point of $200,000, the land transfer tax is clearly a source of increasing revenues for the Province derived largely on the backs of home buyers.

 

9. If Manitoba is willing to make adjustments in rates and/or house value brackets upon which they apply, including offering a first-time home buyer exemption, are their ways it can recover the lost revenue it stands to gain every year as property values rise?  

a. If the potential loss in revenue is even $10 million, it represents approximately one-thousands of its total budget. So holding the line on spending and finding more efficiencies in the Province’s entire operations should be possible. It is a matter of prioritization to recognize home buyers are as important to the fabric of the economy as many other government spending priorities such as polar bears, doctor’s tuition rebates or a UNESCO heritage-site designation. 

b. It is also important to point out the more money left in home buyers’ pockets from reducing the land transfer tax burden will go back directly into the economy. As anyone who has bought a new home knows, they will need to spend money on ancillary purchases such as drapes, flooring, new furniture and other home improvement items. 

c. And as for lost sales activity due to the fact the land transfer tax inhibits first-time home buyers from buying a home or move-up buyers from selling their home and buying another one, there is a significant loss in economic spin-offs. Every home sale generates $40,000 in ancillary spending. It also impacts new home construction negatively due to potential buyers finding the high land transfer taxes on a new home too steep and through impeding the resale house market in lower price ranges where sales of existing homes provides the necessary equity for a buyer to qualify for the price of a new home. 

 

10. How does the Land Transfer Tax impact the housing market? 

a. The simplest answer is it makes housing less affordable and prevents a number of potential buyers, especially first-time buyers, from qualifying to purchase a home. It is tough enough to come up with the necessary down payment and closing costs let alone find additional dollars to pay for the land transfer tax. 

b. Land transfer taxes discourage home ownership so do nothing to alleviate a scarce supply of good rental accommodations since there is less movement out of rental property into homes. 

c. As CAAMP economist Will Dunning says in his 2007 study on the perils of nonindexation in Canadian housing markets, “Land transfer taxes do not pass any  tests of fairness. They are discriminatory (applying to only a small percentage of the population each year) and the amounts paid cannot be justified on any reasonable measure of costs to government at large. These very rapid increases in land transfer taxes have pushed them even further into the realm of unfairness.”

d. The land transfer tax is just another real estate tax as owners pay property taxes every year and then must pay thousands more when buying another home. It is a double tax.

e. A land transfer tax can be a deterrent to investment in this province as high closing costs discourage housing opportunities for first-time buyers and others from making their home in our province. As a result, we lose the opportunity to attract new business investment to respond to the increased demand for goods and services resulting from new home purchases.

f. A land transfer tax discriminates against anyone that moves and buys another home.

g. The land transfer tax penalizes people with low amounts of equity in their home since it taxes the entire gross sale amount. The pick pocket tax robs the home equity from unsuspecting home buyers if they have been fortunate enough to build up equity in the home they own.

h. The tax reduces housing opportunities across the entire income spectrum.

Change land transfer tax, say realtors – Winnipeg Free Press – Mar. 23, 2010

March 23, 2010 in Published Articles on LTT by WinnipegREALTORS

Article in the March 23, 2010 issue of the Winnipeg Free Press on Land Transfer Tax. Click here for PDF. Or visit the original article here.

Land Transfer Tax Rapped – Winnipeg Sun – Mar. 22, 2010

March 22, 2010 in Published Articles on LTT by WinnipegREALTORS

Writer Paul Turenne article in the Winnipeg Sun of March 22, 2010. Click here for the PDF.

Rising Like The Red River – WinnipegREALTORS® – Mar. 22, 2010

March 22, 2010 in Published Articles on LTT by WinnipegREALTORS

WinnipegREALTORS® press release of March 22, 2010. “Rising Like The Red River: Land Transfer Tax Revenues Go Up Every Year”. Click here for the PDF.

Top 10 Reasons for a First Time Buyer Exemption – WinnipegREALTORS®

March 16, 2010 in Published Articles on LTT by WinnipegREALTORS

The top ten reasons for a first-time homebuyer’s exemption

 

1. It levels the playing field with other provinces and positions Manitoba for
further growth.
2. It puts new buyers into the marketplace thus creating more home sales. Each
sale creates ancillary spending of $40,000.
3. It will help keep the real estate market stable in a tougher economic
environment where there are more stringent mortgage qualification
requirements and higher interest rates.
4. It will make housing more affordable.
5. It will free up very scarce rental accommodation.
6. It will spur on new home construction.
7. It will keep people working while stimulating the economy. It is cheaper to
keep people working than to create new jobs.
8. It will help maintain consumer confidence in difficult times.
9. It will show that the government is sensitive to the challenges first-time
buyers face in meeting down-payment and closing costs.
10. It will not prejudice other investments over housing – a most basic shelter
need.