Purchasing a property in Winnipeg represents an exciting milestone, but there’s more to it than meets the eye. Between having your offer accepted and receiving the keys to your new home, you’ll have to navigate several closing processes and costs. One of the most commonly overlooked? The Manitoba Land Transfer Tax (LTT).

Like most Canadian provinces, Manitoba charges a land transfer tax on all property purchase transactions. Below, we’ve provided an overview of this tax, how it’s calculated, and who has to pay it. To learn more, schedule an appointment with one of our experienced real estate lawyers at Olschewski Davie:

Understanding Land Transfer Tax In Manitoba: A Homebuyer’s Guide

The Manitoba land transfer tax is a tax that is levied by the Province of Manitoba whenever ownership of a property is transferred. It arises out of the Tax Administration and Miscellaneous Taxes Act and is collected by the Land Titles Office on behalf of the province.  Land Transfer Tax only applies when actual land is being transferred–for instance, the purchase of a trailer located in a mobile home park does not require LTT to be paid.  

Typically, the LTT is paid by the buyer and is due in full at the time of purchase. It is based on the fair market value of the property being purchased and is a standard part of the closing costs necessary to finalize a real estate purchase in Manitoba.  

How Land Transfer Tax Is Calculated In Manitoba

Land Transfer Tax in Manitoba is calculated based on the fair market value of the property being purchased on the date of registration of a transfer title. In most cases, fair market value is defined as the purchase price being paid by the buyer to the seller, but in rare cases (such as if the land is being gifted), an appraisal may be necessary to determine fair market value.

Current Tax Rates And Thresholds

The Manitoba land transfer tax rate increases with property purchase price, as follows:

  • The first $30,000 of the property value is taxed at a rate of 0%.
  • The next $60,000 of the property value (up to $90,000) is taxed at a rate of 0.5%.
  • The next $60,000 of the property value (up to $150,000) is taxed at a rate of 1%.
  • The next $50,000 of the property value (up to $200,000) is taxed at a rate of 1.5%.
  • Any portion of the property value that exceeds $200,000 is taxed at a rate of 2%.

The Financial Impact On First-Time Homebuyers

Understanding the Manitoba land transfer tax is essential for first-time homebuyers in Winnipeg. The LTT is often one of the largest closing costs homebuyers face. 

The LTT can be a significant financial hurdle for first-time homebuyers who haven’t yet built up equity in a previous home to help offset the costs associated with their current home purchase. Proper financial planning is key.

Upfront Costs Vs. Monthly Mortgage Payments

Unlike a mortgage, which can be amortized and paid off monthly over many years, closing costs must be paid in full at the time the property is purchased. In addition to the Manitoba land transfer tax, it is standard for closing costs to also include legal fees, title registration fees, and more. When you meet with your lawyer for your purchase, a more detailed breakdown of the closing costs associated with your particular property purchase will be explained to you at that time.

Exemptions And Rebates: What You Need To Know

Most homebuyers purchasing a home in Winnipeg will not be exempt from the Manitoba land transfer tax; budgeting to pay the tax when you buy a property is typically a necessity. Exemptions for the LTT may be available in cases where:

  • Farmland is being transferred for the purpose of farming
  • Non-commercial property is being transferred between spouses
  • Property is being transferred to a registered charity

 

First-Time Homebuyer Considerations

Manitoba does not currently offer first-time homebuyer land title transfer fee rebates or exemptions. First-time home buyers need to be aware of this tax and plan accordingly.

Strategies To Manage Land Transfer Tax Expenses

At Olschewski Davie, our top three tips in regards to managing land transfer tax expenses are:

  • Be Informed – Educate yourself about the Manitoba land transfer tax to avoid contending with a last-minute financial burden when purchasing a property.
  • Factor in Closing Costs – Before you make an offer on a property, calculate the anticipated closing costs and ensure you have the necessary funds available.
  • Save With Closing Costs in Mind – Many Manitobans set aside savings specifically for closing costs, such as the land transfer tax, when purchasing a home.  

Working With A Real Estate Lawyer To Navigate Closing Costs

At Olschewski Davie, we have completed over 55,000 real estate transactions, helping clients smoothly navigate property purchase closings in Winnipeg and the surrounding areas. We’ll walk you through every step of the process and ensure you’re well supported and prepared when move-in day finally arrives!

Legal Guidance For A Smoother Home Buying Experience

Ready to purchase a home in Winnipeg? We’re here to help. Contact Olschewski Davie to schedule an appointment today!