Higher rents likely, Manitoba landlords warn after province removes education property tax rebates

Some Manitoba landlords say they'll have no choice but to raise rents, after the provincial government promised tax relief for at least some rental property owners under its overhaul of the education property tax system but failed to deliver.

This is the first year in which the NDP government is providing homeowners with a credit, valued at up to $1,500, on their school taxes.

Under the former Progressive Conservative government, the province instead offered a 50 per cent rebate on school taxes, but all residential property owners were eligible — not just homeowners. 

Finance Minister Adrien Sala said a year ago the NDP government was revamping the way the education system is funded and would find a way to help landlords — the "small businesses," as he described it — left out by the new credit system.

But the new education funding model was scrapped, seemingly along with any tax breaks for landlords and commercial property owners specific to education property levies.

Avrom Charach, spokesperson for the Professional Property Managers Association, said the landlords his group represents aren't pleased.

"They're mad as hell, because we're absorbing [the added costs] this year, and because it'll pass on to the tenants."

Charach said higher rents are inevitable, and his business, Kay Four Properties, is likely to apply next year for rent increases above the government's cap.

Rent hikes this year are limited to 1.7 per cent, which Charach says is well below other cost increases to city and school taxes, water and sewer rates, and waste collection.

"It's not just the landlord raising rent. It's that we're being forced into raising the rents," he said.

He pointed to a 48-unit apartment complex owned by Kay Four Properties on Jefferson Avenue in Winnipeg, which is losing out on a rebate that last year was worth more than $19,000.

"The only choice we have as property managers is to continually apply for these rent increases above the guideline, because we're always catching up," he said.

Sala wouldn't acknowledge in an interview Thursday his earlier pledge to help "small businesses" with their education property taxes.

Instead, he stressed the province is keeping costs low for businesses through various measures, including a one-year freeze on electricity rates and an upcoming $10-million security rebate program.