As of October 20, 2024, buying a home in Alberta will become slightly more expensive due to increases in land transfer and mortgage registration fees. Here’s what you need to know about these changes and their implications for purchasers and borrowers.
Current vs. New Fee Structure
Previously, the fees for land transfers and mortgage registrations in Alberta were relatively low. The land transfer fee was $2 per $5,000 of the purchase price, and the mortgage registration fee was $1.50 per $5,000 of the mortgage amount. However, as of October 20, 2024, these fees will increase to $5 per $5,000 for both land transfers and mortgage registrations, in addition to a $50 base fee for each.
Implications for Purchasers and Borrowers
The increased fees will significantly impact the closing costs for homebuyers. For example, a transaction involving a $450,000 property with a $405,000 mortgage would currently incur fees of approximately $401.50. Under the new fee structure, this same transaction will cost around $955, representing an increase of $553.50.
Financial Impact
To put this into perspective, here is a breakdown of the costs:
Current Fee Structure
- Land Transfer: $50 (base fee) + $2 per $5,000 of property value
- Mortgage Registration: $50 (base fee) + $1.50 per $5,000 of mortgage amount
- Total for a $450,000 property with a $405,000 mortgage: $401.50
New Fee Structure
- Land Transfer: $50 (base fee) + $5 per $5,000 of property value
- Mortgage Registration: $50 (base fee) + $5 per $5,000 of mortgage amount
- Total for a $450,000 property with a $405,000 mortgage: $955
Comparative Context
While the fee increase is substantial, it is important to note that Alberta’s fees remain among the lowest in Canada for registration fees or equivalent property transfer taxes. This makes Alberta still a relatively cost-effective place for property buyers and mortgage holders compared to other provinces like Ontario and British Columbia, which have higher land transfer taxes.
