Manitoba Expanding Land Transfer Tax to Beneficial Transfers

Significant changes are coming to Manitoba’s land transfer tax regime.

Effective January 1, 2027, Manitoba is expanding its land transfer tax regime to apply to beneficial (unregistered) transfers of land, even where legal (registered) title is not being transferred. The amendments bring Manitoba’s regime more closely in line with Ontario’s and Quebec’s current regimes and will affect transactions involving bare trusts, nominees and other ownership structures that separate legal and beneficial ownership of land.

Under the current legislation, land transfer tax is generally only payable when an instrument transferring legal title to land is registered in the Manitoba Land Titles Office, and is not payable in connection with a transfer of only the beneficial interest in land. Accordingly, in the context of a transaction where legal title remains unchanged, such as when title is held by a nominee or bare trustee and the shares of such nominee or bare trustee are transferred, no land transfer tax is payable.

The amendments, announced in Budget 2026, are intended to “prevent avoidance” and ensure fairness in land transactions. Anti-avoidance rules have also been introduced to address transactions undertaken to reduce the amount of tax otherwise payable.

Tax Rates

The amendments do not create separate tax rates. Taxable beneficial transfers will be subject to the existing Manitoba graduated land transfer tax rates, which are currently based on the fair market value of the land at approximately 2%.

Exemptions

The existing exemptions continue to apply to beneficial transfers, including distributions of land to a transferee corporation that held all of the issued shares of the distributing corporation immediately before its dissolution or winding up. Additional exemptions have been introduced, including to prevent double taxation where land transfer tax has already been paid upon registration, where retail sales tax has previously been paid on buildings or improvements forming part of the property, and for transfers of beneficial interests made solely as security for a loan.

The exemptions remain relatively narrow and do not extend to many common corporate transactions and reorganizations involving related parties. Further exemptions may be prescribed by regulation; clarification or expansion in this regard is awaited, particularly where the economic interest of the land remains within a corporate group.

Reporting

Unless the transaction is exempt, the transferee — the person who acquires a beneficial interest in land or whose beneficial interest in land increases — must file a return and affidavit of fair market value of the land with the Minister of Finance and pay the land transfer tax within 30 days of the beneficial transfer.

Key Takeaways

All Manitoba landowners should review the new rules to ensure compliance with the amended legislation, and buyers of Manitoba land, including from internal restructuring, should consider any additional tax costs or planning opportunities for transactions scheduled to close on or after January 1, 2027.

For any questions about the scope and application of these measures, please contact the authors or any other member of our Commercial Real Estate or Tax groups.