April 16, 2013, Winnipeg, Manitoba – For Immediate Release – The Manitoba government’s decision to increase the Retail Sales Tax by one percent is a blow to all home owners, especially first time home buyers and young families, according to REALTORS® in Manitoba.
“This government has not demonstrated a great deal of responsibility in terms of making Manitoba a positive, welcoming environment for property owners, encouraging them to invest in Manitoba, said MREA’s Chair of the political action committee Lorne Weiss. “The government’s decision to increase PST is going to make home ownership even more expensive. For every home that’s sold on the MLS® system in Manitoba, the spinoff is approximately $40,000 in additional items needed for that home. With today’s PST increase, that amounts to an extra $400 cost – in addition to the Land Transfer Tax, plus the PST on their home insurance premiums, legal fees and the cost of registering the title.”
WinnipegREALTORS® Association Director of Public Affairs, Peter Squire says “up and comers are down and out” in this provincial budget, adding that the PST increase is a disincentive for young potential homeowners thinking about moving back to Manitoba. Squire also says the government’s decision to phase out the education portion of property tax bills for seniors in this budget may have unintended consequences for young buyers. “The government is encouraging seniors to stay in place, so that won’t free up houses for other people.
“While they’re helping one segment of the market, what is the province doing for the up and comers, the first time buyers – people we want to attract to our province, people we don’t want to see migrate to places like Alberta and Saskatchewan? How are we building our future economy?” asked Squire.
REALTORS® also wonder whether everyone else’s education taxes will increase as a result. “How is the province going to make up the money they’re going to have to cover for seniors, which amounts to $50 million dollars in the next two years? Where are they going to find that $50 million? Some could come from the increase in PST, but a lot of that will be necessary for infrastructure improvements, including the flood protection improvements. Other taxpayers may have to feel the burden for that, said Squire.
In a snap shot here are the (estimated) fees that this generation of homeowners will face on an average $250,000 home in a suburban neighbourhood in Winnipeg once the new PST rules take effect in July.
- $80 Registration Fee for your new Land Title
- $20 in PST on Land Title insurance (based on title insurance of $250)
- $72 in PST on home insurance premiums (based on a $900 policy)
- $40 in PST on lawyer fees buying and selling (based on $500 in fees)
- $2,650 in Land Transfer Tax (paid by the buyer)
- $794 in Education Tax (based on property in the Louis Riel School Division; Total Education tax bill of $1494 minus a $700 tax credit = $794)