By Peter Squire
The first day of summer is June 20, and it looks like we got off to a head start with record high temperatures soaring well above 30° C in the early part of the month.
The Winnipeg Regional Real Estate Board (WRREB) has experienced record-setting highs of late, too, with MLS® sales and dollar volume. In May, for example, a new record was established for monthly dollar volume of over $692 million based on over 2,000 sales. Condominiums had their best sales month ever with 293 sales.
Prices are also at all-time highs with an average single-family home in Winnipeg selling for $402,144 in May. For the entire market region, including Winnipeg, the average sales price in May for a home was $387,338 and a condo was $254,928.
One of the challenges that REALTORS® are experiencing is having enough listings come onto the market to meet the insatiable demand. Buyers’ desire to engage in our regional market in a way we have never seen before really began in earnest in June 2020 and has never let up since. Over the last 12 months, every month had its highest sales ever on record with the peak performing month being April of this year at 2,055 sales. This past May was not far behind as only the second month to eclipse 2,000 sales at 2,006.
Listings entered on the MLS® for the first 5 months of 2021 are up 9% from 2020 but off 5% from 2019 — the last year that had a spring market unaffected by the current pandemic.
As more Manitobans become vaccinated, our hope is that the trend we’ve seen in other real estate markets across Canada — where more owners are willing to put their property up for sale — will happen here. Ideally, you always want to see a balanced market but currently it is firmly entrenched in favour of sellers.
Another thing related to real estate which happens every June is the City of Winnipeg’s deadline to pay your municipal property tax bill. You should have already received your property tax bill in the mail. Here are a few important points from the City of Winnipeg in this regard.
The 2021 property tax due date remains Wednesday, June 30. However, in support of owners who may need temporary relief due to COVID-19, Winnipeg City Council has waived penalties on 2021 property taxes for a period of three months to September 30, 2021. After that, beginning on October 1, penalties will be applied to unpaid property taxes at a rate of 2.5% per month.
Another important development this year is the provincial government’s commitment to cut education taxes off of property as per their election pledge in 2019 and throne speech in 2020. The 2021 provincial budget delivers a 25% cut in residential and farm property owner’s education taxes and a 10% reduction for other property types such as commercial and recreation.
In the City of Winnipeg’s case, 173,078 residential customers that used to receive the $700 education property tax credit towards their total property tax bill will instead receive a tax credit of $525 since it has been reduced by 25%. Therefore they will see an increase in their school taxes of $175 due to this credit change. The municipal tax portion of their bill will see a 2.33% increase as per the approved 2021 municipal property tax increase and there are no changes on the frontage levy rate of $5.25 per foot. There are always exceptions, such as homes that have been reassessed for reasons such as renovations, new construction and even demolition.
So you will have a higher property tax bill to pay at the end of this month, but as a residential property owner you will receive an education property tax rebate cheque of 25% of your total education tax bill as per the special education levy charged by the school division your property is located in. For example, if your school division special levy is $2,000, you can expect to receive a cheque of $500 which will more than offset the reduction of $175 from your $700 provincial education property tax credit.
Going forward, the provincial government has already committed to reducing residential and farm property owner’s education taxes by 50% in 2022, and likewise the provincial education property tax credit will be reduced from $700 to $350. It is all part of the Manitoba government’s commitment to a complete multi-year phase-out of education taxes on property. For more information you can go to manitoba.ca/edupropertytax
In the case of farm property, owners still need to apply for the Farmland School Tax Rebate.
For Winnipeg property owners it is important to note that the current assessment cycle is 2020-2022, with the reference date for your current assessed value based on April 1, 2018. April 1, 2021, is the reference date for establishing your property value for the next general assessment to come into effect in 2023. Residential preview values will be released to property owners in January 2022.
One common misconception often cited when a new general assessment comes into effect is addressed by City of Winnipeg City Assessor Kelly Shields.
“The assessed value of property is simply one part of a distribution mechanism for taxes. An increase in assessed value for a general assessment (2023) does not necessarily mean a corresponding increase in property taxes. An understanding of the tax distribution for 2023 will be known in the summer of 2022,” he said.
In conclusion, June isn’t just a kick-off to summer and a continuation of a very active real estate market. It also comes with an extra ray of sunshine as many property owners will have a little more money to spend as a result of receiving their education property
tax rebate cheque.
Peter Squire is the Winnipeg Regional Real Estate Board’s Vice-President, External Relations & Market
Intelligence.