WINNIPEG – A recurring theme this year as evident in October has been the consistent dollar volume strength of the Winnipeg resale market. Despite sales being softer this year than the two previous years, dollar volume in 2009 is within reach of setting a new all time level above last year’s record of $2.42 billion. Helping spur October’s high dollar volume relative to number of sales is three more million dollar plus home sales. There have now been 12 million dollar plus home sales and one million dollar plus condo sale, five more than the highest yearly total achieved in 2008. Also noteworthy in comparing October’s dollar volume to last October is the more pronounced activity in the $200,000 to $250,000 price range – a 30% increase over the same price range from a year ago.
Significant to the progression in Winnipeg’s housing market to this higher price range is the highest land transfer tax rate in the country at 2% kicks in after $200,000. So, if someone is buying a home at the top end of this price range at $250,000, they are paying the provincial government another $1,000 in addition to the $1,625 they are required to pay for a house value of $200,000. What is most troubling is an increasing number of these home buyers are first time buyers who in essence are being double taxed as they are using after tax income dollars to come up with the necessary down payment and closing costs. At least for second time buyers they may have the benefit of using the proceeds from the sale of their first home to help cover off the province’s land transfer tax. Of the provinces that have a land transfer tax, most offer a first time buyer exemption in recognition of this unfair tax treatment.
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