Manitoba Above-Guideline Increase: How to Calculate Eligible Expenses for Form 3

Filing Form 3 for an above-guideline increase in Manitoba is not just a procedural step — it is an accounting exercise with specific rules about which expenses qualify and how they must be calculated. Self-managing landlords routinely under-claim permitted costs while over-claiming items the RTB disallows.

What Form 3 Requires

An Application for Rent Increase Above Amount Permitted by Regulation must demonstrate that legitimate operating cost increases or capital expenditures justify a rent increase beyond the annual guideline. The RTB reviews the financial schedules in the application and issues a binding order on the approved amount.

The application must be filed no later than 14 days after the beginning of the three-month notice period for the first increase in the application. The filing fee structure scales with complex size: $150 for complexes with 19 or fewer units, $500 for 20 to 49 units, and $500 plus $5 per unit for 50 or more units, capped at $1,000.

Operating Cost Increases

The RTB compares operating expenses from two reporting periods, each covering 12 consecutive months: a current period and the immediately preceding period. Eligible operating cost categories include:

Property taxes and municipal levies. Insurance premiums. Utilities that the landlord pays directly (heating fuel, water, common-area electricity). Maintenance and repair costs for work already completed. Landscaping, snow removal, and common-area cleaning contracts.

Form 3 records the increase or decrease by category. A decrease is a negative amount that can offset increases elsewhere; a category with no change adds nothing.

The 5% Self-Management Fee

Self-managing landlords who do not employ a licensed property management company are entitled to claim a management fee allowance of 5% of gross rental revenue. This line item is frequently overlooked because it does not correspond to an invoice or receipt — it is a statutory allowance recognising the landlord's own administrative labour.

The 5% is applied to the complex's revenue for the reporting period. The regulation defines revenue as rent from non-exempt units and excludes tenant-services charges.

Capital Expenditures and Amortization

Form 3 applies an allowable percentage to the total acquisition or replacement cost of an eligible capital expense. The regulation does not set standard useful-life periods in years.

Effective October 30, 2026, M.R. 116/2026 set the listed allowable percentages at 20%, 15%, 10%, or 7.5%, depending on the item. Windows and heating, ventilation, and central air-conditioning systems are in the 10% category if they meet the Director's energy-efficiency standards, and the 7.5% category if they do not. The new percentages apply to applications without an RTB order issued before October 30; applications already subject to an order keep the previous rates.

Form 3 asks for the total cost and the allowable percentage, then uses only the allowable portion in the increase calculation. The RTB may adjust the category or percentage if the invoices or expense classification do not support the amount claimed.

What the RTB Disallows

Mortgage principal is not an eligible expense. Mortgage interest is not an operating expense, but qualifying interest may be included in the deficit calculation subject to section 10 of the regulation. The property purchase price is not a Form 3 expense, and professional fees related to acquisition or initial financing are excluded from operating expenses. Vacancy losses and bad debt are also excluded.

Costs related to work that has not yet been completed cannot be claimed. The Form 3 schedules require invoices or receipts for work already done, not estimates for planned projects.

Practical Preparation

Before filing, organise expenses into operating costs and capital items separately. Compare each operating line item across the two reporting periods. Apply the allowable percentage to each capital item. Add the 5% management allowance if self-managing.

The Manitoba Rent Increase Guide includes an AGI expense worksheet that mirrors the Form 3 financial schedules, designed for landlords preparing the application without a property manager or accountant.

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