While Alberta has substantially increased its land-transfer costs, its levies still remain the lowest in Canada
Changes to provincial levies mean the cost of buying a home in Alberta has increased — though the province still has the country’s lowest fees for homebuyers.
Alberta’s new land-transfer fees went into effect last Sunday. Under the changes, homeowners will now be charged $5 per $5,000 of property value — an increase from $2 per $5,000. Meanwhile, the variable fee for mortgage registrations and caveats that charge the land has jumped from $1.50 per $5,000 in mortgage value to $5 per $5,000.
The $50 flat fee for land and mortgage registration transfers has not changed.
The increased fees will bump up the cost of purchasing a home, though a Calgary real estate agent said homebuyers shouldn’t be overly concerned.
“I would say it’s more of a drop in the bucket,” said Mark Neustaedter, associate at eXp Realty. “Obviously, you don’t want a higher barrier to purchasing homes in Alberta. But at the same time, when you think about it as a percentage of the purchase price, it’s fairly minimal.”
Based on a $450,000 property with a $405,000 mortgage, the land-transfer fees would have been $401.50 before the change, according to a recent newsletter published by the Alberta government. With the increase, that amount would now be $955.
The change was announced earlier this year in the Alberta government’s 2024 budget. The province said the new fee will increase the province’s revenues and help pay for modernizing Land Titles and Surveys Registry Services, and will also fund other provincial priorities unrelated to land titles.
While the changes will increase the cost of buying a home, those costs remain a fraction of total sale prices. Alberta will also remain the lowest-cost province when it comes to land transfer charges.
British Columbia, for example, has a one-per-cent tax on the first $200,000 of a property, two per cent on the amount between $200,000 and $2 million, three per cent on the next $1 million, and five per cent on the remaining value if it exceeds $3 million.
As such, a $450,000 home in Vancouver would include a $7,000 land transfer tax, according to Ratehub.ca. The charge would be $18,000 for a home valued at $1 million.
Alberta is the only province without a land transfer tax.
“At this level, the levy is not expected to have any significant impact on activity in the housing market,” said Brandon Aboultaif, spokesman for Service Alberta and Red Tape Reduction Minister Dale Nally. The levy will cost less than a fifth of the national average, he wrote, and 40 per cent less than Saskatchewan, the next-lowest-cost province.
Neustaedter’s primary gripe with Alberta’s change is that the fees burden homeowners who largely won’t benefit from modernized land titles systems. (For example, SPIN2, the online information system, is only available during certain hours of the week, he said.)
“The seller and buyer don’t really, in my opinion, gain benefit from this perceived upgrade of the system. It will be more for real estate industry, lawyers, agents, employers, because we’re the ones who use it on a day-to-day basis.”