Manitoba to scrap 50% provincial property tax break in 2025, replace it with flat $1,500 credit

Manitoba's NDP government plans to scrap its existing package of education-tax rebates in favour of a single $1,500 property tax credit for every home.

The first budget from Wab Kinew's government, slated to be tabled on Tuesday, will call for the elimination of both the 50 per cent provincial property tax rebate and $350 education tax credit in 2025, a spokesperson for the Kinew government said.

In their place, every property subject to provincial property taxes would receive up to $1,500 off those taxes in 2025, the spokesperson said.

No changes are planned for 2024. The change proposed for next yearwould mean every Manitoba household subject to $1,500 of provincial property taxes or less in 2025won't pay any provincial property taxes at all.

That could amount to nearly half of all provincial households, assuming school division taxes do not rise exceptionally high next year.

Conversely, residential properties with higher valuations would pay more provincial property taxes next year. For example, a home assessed high enough to warrant $2,500 worth of provincial property taxes in 2025 would be left with a $1,000 provincial tax bill after the $1,500 credit is applied.

That same home would be subject to$900 worth of provincial property taxesunder the existing package of credits: a 50 per cent tax break worth $1,250 plusthe $350 credit.

The proposed change allows Premier Wab Kinew to follow through on criticism of the 50-per-cent provincial tax break his party made while they were in opposition. In 2022, members of Kinew's caucussaid that tax break, brought in by the former Progressive Conservative government, primarily benefits more affluent Manitobans and the corporate owners of commercial properties.

For example, Cadillac Fairview, which owns CF Polo Park shopping centre in Winnipeg, received a cheque for $1,048,213 in 2022, CBC News reported as part of an analysis that revealed the owners of the most valuable Winnipeg properties received the largest rebate cheques.

The NDP government spokesperson would not say how much additional revenue Manitoba would raise from provincial property taxes in 2025 as a result of shifting the tax burden to more valuable properties.

Those figures will be published when the budget is made public on Tuesday, the spokesperson said.

Won't affect municipal property taxes

The change in property tax credits will not affect municipal property taxes, which are applied on the same bill.

Paul Thomas, professor emeritus of political studies at the University of Manitoba, said the NDP government may find it difficult to communicate the change in provincial property tax breaks, even as people who own more modest houses stand to benefit more from the new credit.

"They better have some some plausible and effective way to communicate that change," Thomas said in an interview, referring to Kinew's NDP. "People are used to benefits like that. When they get used to them, it's very hard to take them away."

Thomas said many members of the public do not differentiate between municipal and provincial property taxes, which appear in Manitoba on the same bill.

"That will be a real communications challenge, which will call on the skills not only of the finance minister, but also the premier, who is so much front and centre at any major announcement these days by the government," Thomas said.

The change willnot affect property-tax breaks in 2024, the NDP government spokesperson said. The only change is the 50-per-cent tax rebate will appear on property tax bills, instead of being mailed out in the form of cheques later on, the spokesperson said.