This report assesses the relative impact of the residential tax burden in Winnipeg. It uses survey data from different sources to compare Winnipeg’s property taxes with major cities in Canada and the United States.
The fairest and most common way of making this comparison across jurisdictions requires a look at effective property tax rates, that is, property taxes relative to market values. Because property tax is levied on market values and they vary significantly across jurisdictions, a fair judgement about the impact of property taxes here has to be made through the filter of market value. Cities might have similar tax levels, but where market values are high, residents would enjoy much lower effective tax rates than in cities where market values are low. Indeed, Winnipeg, for a variety of public policy reasons, has among the lowest property values in Canada. This translates into high effective property tax rates:
- A comparison of effective residential tax rates for different types of dwellings in 2000, based on the Survey of Canadian House Prices, Spring 2000 from the real estate company, Royal Lepage, show that Winnipeg property taxpayers pay among the highest effective rates in Canada.
- They varied from 2.52 percent for a standard two-story house to 2.21 percent for a condominium. Effective tax rates are lowest in Vancouver, Victoria and Calgary, where they are one percent or less for all housing types. In other parts of the country, effective tax rates on residential property range between one and two percent.
- Effective tax rates are lowest in cities with rapidly growing market values — Toronto, Vancouver, Victoria, and Calgary. Effective tax rates are high in Winnipeg, on the other hand, because of slower growth in housing values.
- Effective property tax rates in Winnipeg are two to three times higher than the average rate in major U.S. cities.
To adjust for the impact of low property values, other measures of tax burden are also used as a basis for comparison. These include: combined property tax and utility charges burden, property taxes relative to income and property taxes per square foot. These measures all confirm Winnipeg’s position as having one of the heaviest residential tax burdens in Canada.
- Combining property taxes and utility charges compensates for the issue that property tax does not fund the same services in every city. For example, garbage is funded from property taxes in some municipalities and from user fees in other municipalities. When property taxes and utility charges are combined, Winnipeg has the third highest total charges on a standard house in Canada of 17 cities compared.
- Property taxes relative to income for Winnipeg were 5.6 percent, the highest in the country. The lowest taxes relative to income were in Calgary at 2.6 percent of income.
- A City of Edmonton comparison of city property taxes found that Winnipeg has the fifth highest property taxes per square foot of the fourteen cities compared.
The city with the highest education taxes in the Edmonton survey was Winnipeg, followed by Regina and Saskatoon. This part of the city’s residential tax burden accounts for almost half the amount of its total tax.
Winnipeg has among the highest property taxes in Canada. When smaller cities like Regina and Saint John are excluded, it has the heaviest effective residential tax burden in Canada.
Full Text of Policy Series No. 9 – (PDF, 39 pgs, 208 Kb)