Buying or selling a home can be one of the most significant and life changing events a person will experience. The process can be an overwhelming one, but when it is handled with due care, the end result will be very rewarding. Research and careful budgeting is required in order to ensure that the process goes smoothly and the aid of an experienced law firm is essential to make sure nothing gets overlooked. The following information is presented to assist prospective purchasers and vendors, but is neither designed nor intended to be a substitute for obtaining legal advice. As with any legal contract, an agreement of purchase and sale should not be signed without first consulting a lawyer.
Real Estate Transaction Costs
There is an array of costs and fees associated with any real estate transaction. Each of these ought to be considered and discussed with the professionals involved in your real estate transaction.
Legal Fees
When determining legal fees associated with a real estate transaction, discuss with your lawyer the additional costs for Harmonized Sales Tax as well as disbursements for: search fees, administration or conveyance fees, judgment searches, Geolinc fees, any applicable courier costs and document production. Consider whether a flat fee is inclusive of these costs.
Deed Registration
When purchasing real estate, the purchaser is responsible for having the deed registered. The registration cost for a deed is paid to the provincial government and is based on the purchase price as indicated in the following table.
Mortgage Registration
When purchasing real estate, if the transaction is financed with a mortgage, the purchaser is responsible for having the mortgage registered. The registration cost for a mortgage is paid to the provincial government and is based on the mortgage amount, unless it is a collateral mortgage, as indicated in the following table.
Real Property Transfer Tax
Anyone who registers a deed of conveyance in Prince Edward Island must pay a tax computed at the rate of 1% of the greater of the purchase price or the assessed value of the real property. There are, however, certain exemptions for real property transfer tax. The most common exemptions are as follows:
Island Regulatory and Appeals Commission
Non-residents of Prince Edward Island may require Island Regulatory and Appeals Commission ("IRAC") approval prior to purchasing real estate in Prince Edward Island. Such an application may involve fees. The non-resident application fee is the greater of $550 or 1% of the agreed purchase price. With respect to the acquisition of the shares of a corporation the application fee is $550 or 1% of the assessed value of the relevant amount of land holdings. One ought to discuss the applicability of the P.E.I. Lands Protection Act with a lawyer.
Additional Purchase Costs
Among the other closing costs of a purchase or refinance are home inspection, mortgage default insurance, title insurance, fire insurance, survey/plot plans, adjustments for property taxes, municipal charges for sewer and water, water test, heating oil, propane and propane tank rental, moving costs and utilities fees.
Additional Sale Costs
Among the other closing costs of a sale are registration fees for satisfying any mortgages against the property, payments for unsecured debts, Power of Attorney registration fee, third party home closing fees, adjustments for property taxes and municipal charges for sewer and water. There may also be adjustments for such things as heating oil, propane and propane tank rental may be payable on the sale of real property. Used residential (unless substantially renovated) is exempt from HST. If a property is partly commercial and partly used residential, HST is payable on the portion which is commercial.
Real Estate Transaction Costs
There is an array of costs and fees associated with any real estate transaction. Each of these ought to be considered and discussed with the professionals involved in your real estate transaction.
Legal Fees
When determining legal fees associated with a real estate transaction, discuss with your lawyer the additional costs for Harmonized Sales Tax as well as disbursements for: search fees, administration or conveyance fees, judgment searches, Geolinc fees, any applicable courier costs and document production. Consider whether a flat fee is inclusive of these costs.
Deed Registration
When purchasing real estate, the purchaser is responsible for having the deed registered. The registration cost for a deed is paid to the provincial government and is based on the purchase price as indicated in the following table.
Mortgage Registration
When purchasing real estate, if the transaction is financed with a mortgage, the purchaser is responsible for having the mortgage registered. The registration cost for a mortgage is paid to the provincial government and is based on the mortgage amount, unless it is a collateral mortgage, as indicated in the following table.
Real Property Transfer Tax
Anyone who registers a deed of conveyance in Prince Edward Island must pay a tax computed at the rate of 1% of the greater of the purchase price or the assessed value of the real property. There are, however, certain exemptions for real property transfer tax. The most common exemptions are as follows:
- Low Cost Transfer
Real Property Transfer Tax is waived if the greater of either the purchase price or the assessed value of the real property does not exceed $30,000. - First-Time Homebuyer
Real Property Transfer Tax can be waived if the Purchaser is a First-Time Homebuyer. In order to qualify as a First-Time Homebuyer, the Purchaser must have continuously maintained his or her principal residence in Prince Edward Island for at least six (6) months immediately before the date the deed was registered, or have filed income tax in Prince Edward Island and must not have owned property in any other jurisdiction. If the purchaser continuously maintains his or her principal residence in Prince Edward Island for a period of six (6) months after the closing date, he or she can then apply to have the land transfer tax that was paid on closing refunded to them, in whole or in part. - Intra-Family Transfer
No Real Property Transfer Tax is payable on the registration of a deed of conveyance if the recipient(s) is/are all members of the family of the person making the transfer, and the transfer is made without consideration in excess of $1.00.
Island Regulatory and Appeals Commission
Non-residents of Prince Edward Island may require Island Regulatory and Appeals Commission ("IRAC") approval prior to purchasing real estate in Prince Edward Island. Such an application may involve fees. The non-resident application fee is the greater of $550 or 1% of the agreed purchase price. With respect to the acquisition of the shares of a corporation the application fee is $550 or 1% of the assessed value of the relevant amount of land holdings. One ought to discuss the applicability of the P.E.I. Lands Protection Act with a lawyer.
Additional Purchase Costs
Among the other closing costs of a purchase or refinance are home inspection, mortgage default insurance, title insurance, fire insurance, survey/plot plans, adjustments for property taxes, municipal charges for sewer and water, water test, heating oil, propane and propane tank rental, moving costs and utilities fees.
Additional Sale Costs
Among the other closing costs of a sale are registration fees for satisfying any mortgages against the property, payments for unsecured debts, Power of Attorney registration fee, third party home closing fees, adjustments for property taxes and municipal charges for sewer and water. There may also be adjustments for such things as heating oil, propane and propane tank rental may be payable on the sale of real property. Used residential (unless substantially renovated) is exempt from HST. If a property is partly commercial and partly used residential, HST is payable on the portion which is commercial.
Deed Registration
|
Value of Real Property |
Deed Registration Cost |
|
Less than $10,000 |
$77.25 |
|
$10,000 or greater, but less than $20,000 |
$103.00 |
|
$20,000 or greater, but less than $50,000 |
$154.55 |
|
$50,000 or greater, but less than $100,000 |
$231.80 |
|
$100,000 or greater, but less than $150,000 |
$309.10 |
|
$150,000 or greater, but less than $200,000 |
$386.40 |
|
$200,000 or greater |
$463.65 |
Mortgage Registration
|
Value of Real Property |
Deed Registration Cost |
|
Less than $10,000 |
$77.25 |
|
$10,000 or greater, but less than $20,000 |
$103.00 |
|
$20,000 or greater, but less than $50,000 |
$154.55 |
|
$50,000 or greater, but less than $100,000 |
$231.80 |
|
$100,000 or greater, but less than $150,000 |
$309.10 |
|
$150,000 or greater, but less than $200,000 |
$386.40 |
|
$200,000 or greater |
$463.65 |
|
Collateral Mortgage |
$103.00 |
|
Satisfaction of Mortgage |
$77.25 |
|
For all other documents (assignment of mortgage, release of mortgage, release of judgment lien, mechanic's lien, lease, option to purchase, power of attorney) |
$77.25 |
|
Certified copy of any registered deed, document or mortgage |
$25.75 |
