Many MNPHA members qualify for special tax treatment as “Elderly and/or Infirm Persons’ Housing” providers. As operating agreements end and rent structures change, it is important for providers to know how to reapply for the License accurately.
Last year, at license renewal time, we received a question from one of our members regarding eligibility: while unit size requirements are grandfathered for most organizations whose operating agreements are ending, the license requires that household income for an eligible unit does not exceed five times the annual rental charges. Manitoba Housing confirmed that organizations can still apply with a portion of eligible units, and these will be rounded to the nearest 25% (e.g. if 90 out of a possible 100 units qualify, 100% of units will be considered “eligible”. If 80 out of 100 qualify, 75% will be considered eligible). For details and the application form, click here.
We received clarity from Assessment Services regarding the tax calculations associated with the Elderly and Infirm Persons Housing License when only a portion of units are eligible. Generally, there are tax savings associated with the License unless you are in a municipality with a significantly higher property tax rate as compared with the school tax rate. Download the Sample Calculation Sheet, as an excel document, to see how different rent and income structures might impact your taxes.
MNPHA will be holding an educational session on the Elderly and Infirm Persons Housing Act License and on GST post-operating agreement this year – watch the newsletter and our website for details