Understanding the Increase in Your Premiums
Government of Manitoba applies Retail Sales Tax (RST) to Property Insurance Premiums
Effective July 1, 2013, retail sales tax (RST) will apply to most homeowner and commercial insurance policies sold in Manitoba.
Insurance premiums will now be charged 8% RST in addition to the 4.25% tax already levied on premiums by the Government of Manitoba (the 4.25% is made up of 3% premium tax and 1.25% fire prevention tax). Total provincial tax on most property insurance premiums will now be 12.25%.
Unfortunately, this new tax will be layered onto existing and necessary annual increases that the company applies to keep up with rising costs. Normal increases include inflation of building values due to rising construction costs and rate increases to respond to loss performance in certain areas.
In addition to these normal increases, the Province of Manitoba will now collect a 8% RST (over and above the 4.25% tax already levied). The result is that all Manitoba policyholders (regardless of their insurance company), will incur a significant cost increase on their policy at the next renewal.
If you have any questions about rate increases or your policy, please contact your preferred insurance broker.
If you have questions, comments, or concerns for the Government of Manitoba, we recommend you contact the Manitoba Finance Taxation Division at 1-800-782-0318 / MBTax@gov.mb.ca or contact your local MLA.
We thank you for your understanding and for your business.
Management of Red River Mutual