Land Titles Transfer Tax: A financial ‘kick in the ‘nads’
I wrote about Winnipeg Land Titles office, and the reason why there is usually a 3 to 4 week delay between the date-of-possession for a home, and the date-of-receiving money for the sale. A while back, I sat down with a nice couple who were writing an offer on a house, and the conversation turned to the ‘Closing Costs’ of the purchase. The conversation went something like this:
Mr. Buyer: So aside from the lawyers fees (which we had already discussed), what other costs will I need to budget for?
Bo: Well, there will be home insurance. Good news is that you won’t have to pay any property taxes, because we’re doing this in January. But of course you have to budget for the Land Titles Transfer Tax.
I did a quick mental calculation, and gave him the cost, and then watched as his face went thru the classical 5 stages of grief, from Denial (“This Can’t Be Right), to Anger ((F*#@ing Govm’t), Bargaining (Isn’t there a way around this), Depression (Oh, Man…..that’s alot of dough) to finally Acceptance (Well, It IS a nice house and there is NO WAY around it, short of leaving our province). So just how much is the government raking in with this tax?
Land Titles Transfer Tax calculation:
While Manitoba is not the only province to impose this tax, it is by far the most aggressive and onerous. Thru a set of formulas, we arrive at a figure of $1720 for a $200,000-house or condo. With Winnipeg’s average house price hovering around the $230,000 mark, we can see that our Provincial Government is collecting approx. $2000 in taxes, EVERY TIME the title of a house is transferred. But wait, you say…. didn’t Bo just tell us that it costs $1720 for a $200K home?
Yes, but I haven’t told you the worst part: ABOVE the $200K price, this tax adds an additional 2% on EVERY DOLLAR.
So, a $300,000 home will cost you $3720 (calculated by adding the $1720 base, plus 2% on the additional $100,000 price = $3720)
While the Land Titles Transfer Tax is especially difficult for young, first-time home buyers, even people ‘with money’ find an added tax of 4 grand or more to be a financial ‘hit’. For that reason, Winnipeg REALTORS® have been lobbying to change this regressive tax. Let’s bring it more in line with other western provinces. Ideally, inline with Alberta, where a $200K home costs $75 in Land Titles Transfer Tax and a $300K home costs $95. But heck, let’s not even look at those numbers, lets instead compare to my wife’s home province of Saska-Bush …. where it costs just $1200 to transfer the title of a $400,000 home. Manitoba’s fee for transferring the Title of a $400,000 home: $5,720
For a look at more comparisons and for a more in-depth article on the Land Titles Transfer Tax, go to the Winnipeg REALTORS® website at http://2muchltt.com There is even a link to contact your local MLA..