Despite impact-fee suspension, homebuyers may have to pay it

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This article was published 09/07/2020 (1631 days ago), so information in it may no longer be current.

Winnipeg homeowners could still wind up paying impact fees for homes that get permits while the levy is suspended.

On Thursday, the City of Winnipeg announced it had suspended collection of its impact fee — a day after a judge’s ruling deemed it an “invalid, indirect tax” and ordered the city to refund the $32 million the levy collected so far.

The Manitoba Home Builders’ Association said the suspension quickly raised questions among its members, mainly: could builders who obtained permits while the fee was suspended be asked to pay the fee at a later date, should the city successfully appeal the court decision?

The group said it asked the city that question, and was told such later charges are possible.

“They (could) retroactively say, ‘We need you to pay the impact fee on that, even though we suspended collecting it at the time you put the permit in,’” said Lanny McInnes, association president.

McInnes said the association has since told its members to protect themselves and their customers financially, in case the payment is required in the future.

He said he is speaking publicly about the issue to try to prevent confusion among buyers and builders.

“The likely scenario is that they would charge (the fee) and hold it, (until) the city decides what its next step is,” he said Friday.

“We’re concerned that potentially (this) could cause some confusion in the marketplace, in terms of customers rightly thinking that these fees will not be collected on these permits, but that may not necessarily be the case.”

The city introduced the impact fee in May 2017, levying it on new homes in some new neighbourhoods. As of Jan. 1, 2020, it added $5,249.96 per 1,000 square feet to the price of those homes.

Michael Jack, Winnipeg chief corporate services officer, confirmed the impact fee could still be charged on homes built after the suspension took effect.

“We didn’t cancel the fee, we weren’t waiving it or discontinuing it, we were simply suspending it. Implied in that is that it’s temporary, until we decide what the next steps are,” said Jack.

“If an appeal were taken and the city was successful, then that fee would be payable.”

Jack said the city is still reviewing all legal options to respond to the court ruling.

joyanne.pursaga@freepress.mb.ca