Rental housing developers now qualify for tax credits for projects breaking ground in Manitoba any time after December 31, 2023. The newly released 2024 provincial budget reinstates the rental housing construction tax credit that the previous government cancelled in 2019.

In this iteration, both private sector and not-for-profit housing providers can claim the credit, but the incentive formula varies somewhat with the status of the developer and development. A refundable tax credit of $8,500 per unit is on offer for new market-rent housing. That credit increases to $13,500 per unit for housing slated to be maintained as “affordable” for a period of at least 10 years.

In the latter case, not-for-profit developers qualify for a refundable tax credit for the full $13,500, while private developers will receive a $8,500 refundable credit and a $5,000 a non-refundable tax credit that can be claimed at the time of their choosing over a 10-year period. It’s projected that the restored tax credit will equate to about $8.3 million in foregone provincial revenue in 2024-25.

Although the 2024 budget document provides no other details, it makes reference to “incentivizing investment in rental stock through a new time-limited exemption for converting commercial buildings to residential rental units” within a section that tallies a number of measures aimed at increasing affordability for renters. That list also includes:

• strengthening rent control;
• tightening the rules for eligible expenses for above-guideline rent increases;
• enabling authorized above-guideline rent increases to be spread out over several years; and,
• increasing client service at the Residential Tenancies branch.

Looking to the 2025 tax year, the budget announces the first stage of a four-year increase in the renters’ tax credit. Next year it will rise from $525 to $575, while the maximum additional augmentation for seniors increases from $300 to $328.57. A new $1,500 tax credit on principal residences will also debut in 2025 to replace the current combo of a school tax rebate and and education property tax credit, which the budget document describes as “overly complex” and “not sufficiently targeted to those who need it most”.

Meanwhile, 2024 will be the last year commercial ratepayers receive a rebate for school taxes on their property tax bills. Set at 10 per cent this year, it’s to be eliminated ahead of what the budget document promises as “a new education funding model that will support our education system and small businesses”.