Land Titles Registration Fees
Because of the October 2019 provincial budget, the Land Titles Office (the “LTO”) will collect higher fees for the registration of Transfers of Land (“Transfer”) and mortgages, which are recorded after January 1, 2020. The most significant registration fees increase will be borne by buyers who, under the standard form of Real Estate Purchase Contract, are responsible for the payment of these fees (in addition to their own legal fees).
Prior to January 1, 2020, the registration fee collected by the LTO for both a Transfer and a mortgage was calculated as follows:
$50 + $1.00 per $5,000 of declared, or registered, value
This meant that the registration of a Transfer for a parcel of land and building worth $500,000 would cost the buyer $150. Assuming, for this purpose, a mortgage of $400,000 (i.e. 20% down), the mortgage registration would be charged an LTO fee of $130. The total registration fees paid by the buyers would then be $280.
However, and effective as of January 1, 2020, the provincial budget has changed the formula that the LTO will charge for the registration of Transfers and mortgages. The LTO will now charge registration fees based on the following formulae:
Transfer: $50 + $2.00 per $5,000 of declared value
Mortgage: $50 + $1.50 per $5,000 of registered value
Using the hypothetical purchase described above ($500,000 purchase price, with a $400,000 mortgage) the new registration costs will be $250 for the Transfer and $170 for the mortgage. The total registration fees paid by the buyers will now be $420, or an increase of $140.
Unfortunately, the buyer of property in Alberta will now pay a further premium when purchasing property, and those increased LTO fees will be reflected in the amount buyers will pay their legal counsel. This should not be seen as a fee-grab by lawyers, but a reflection of the fact that most, if not all, real estate lawyers pay these LTO fees on behalf of their clients, and will then recover them from their buyer clients, so as to not be out-of-pocket.
While this budgeted increase is somewhat startling, as the LTO has not increased their registration fees since around 2011, our Land Title registration fees are still remarkably low compared with other provinces. We do appreciate that every dollar spent toward the purchase of a property comes from the buyers pocket, but we provide, for interest sake, a list of the registration fees, or land transfer taxes, charged by other provinces for the same $500,000 land value, with a $400,000 mortgage, all of which are paid by buyers of property. Alberta’s LTO fees are about 75% lower than the next lowest province (Saskatchewan) below the 60th parallel, and are still around ½ of the fees charged in the North:
|NS:||$2,500.00 – $7,500.00
(depending on municipality)
Our office will be adjusting the fees charged to purchasers of property to reflect the increased LTO fees and will be posting those changes soon. Please feel free to call to receive a quote for your purchase file.