Calgary Homebuyers: Navigating the New Land Titles Registration Levy

Calgary Homebuyers: Navigating the New Land Titles Registration Levy

What Calgary Homebuyers Need to Know About the New Land Titles Registration Levy

As of October 20, 2024, a new Land Titles Registration Levy will take effect in Alberta, replacing previous variable fees on property transfers, mortgage registrations, and certain caveats. Whether you’re purchasing a home in Calgary’s vibrant inner city or refinancing your mortgage, understanding this change is essential for effective financial planning.

In this post, I’ll explain the levy’s impact on real estate transactions and how it fits into the broader landscape of Alberta’s housing market. Let’s explore what this new fee structure means for buyers, sellers, and homeowners.

 

What Is the New Land Titles Registration Levy?

The Land Titles Registration Levy replaces the old variable fees for land transfers, mortgages, and caveats with a standardized charge of $5 per $5,000 of property or mortgage value. This change aims to simplify the fee structure while aligning Alberta with other provinces that already have similar levies or land transfer taxes.

For example, the new levy will increase ​​the total registration fees on a $450,000 property with a $405,000 mortgage from $401.50 to $955 with the new levy.

 

Essential Details to Keep in Mind

1.Levy Applies to Transactions on or After October 20, 2024

  • Complete submissions received by Land Titles and Surveys before October 20 will follow the old fee structure.
  • Incomplete or rejected submissions may need to be resubmitted, possibly incurring the new levy if submitted after October 20.

2.Flat Fees Unchanged, but Variable Fees Replaced

  • The $50 flat fee for land and mortgage transfers remains unchanged.
  • Variable fees are replaced by the new levy rate of $5 per $5,000 of value.

3.No Exemptions Available

  • The new levy applies to all qualifying transactions, including transfers, mortgages, and applicable caveats.

 

How Does the New Levy Compare Nationally?

While Alberta’s new levy increases transaction costs, it remains more affordable than other provinces' land transfer taxes (LTTs). Even with the increase, Alberta’s fees are less than one-fifth of the national average. Compared to Saskatchewan, the next most affordable jurisdiction, Alberta’s fees are 40% lower for a typical residential transaction.

This relatively modest increase helps Alberta generate revenue for essential services—such as healthcare, infrastructure, and modernization of Land Titles—while keeping the real estate market competitive.

 

How Will This Impact Calgary Homebuyers?

1.Plan for Higher Closing Costs:

Buyers should prepare for higher fees at closing. If you’re purchasing a $850,000 home, the levy alone will amount to $850, a notable addition to your overall expenses.

2.Timing Submissions Wisely:

With the implementation date fast approaching, buyers and their legal teams should prioritize submitting documents before October 20 to avoid the higher fees.

3.Mortgage Considerations:

Mortgage registrations will also incur the new levy, meaning buyers taking out large mortgages should account for this fee for homebuyers, sellers, and investors so you can plan ahead with confidence.

 

What Is the Land Titles Registration Levy?

The new Land Titles Registration Levy replaces the previous variable fees with a set rate of $5 per $5,000 of property or mortgage value. This change applies to land transfers, mortgage registrations, and certain caveats that charge the land.

For context, under the old structure, buyers would pay $2 per $5,000 of property value for transfers and $1.50 per $5,000 of mortgage value. With the levy’s introduction, these rates have increased, meaning higher costs for those purchasing property or refinancing mortgages.

 

How Will This Impact Your Home Purchase?

To understand the difference, let’s take a practical example:

  • Previous Fee Structure: On a $450,000 property with a $405,000 mortgage, the total fees would amount to $401.50.
  • New Levy Structure: With the new levy in place, the same transaction will now cost $955.

This increase may not seem significant compared to other provinces with higher land transfer taxes, but it still adds to the overall cost of purchasing a home in Calgary. Planning ahead is essential to ensure you’re financially prepared at closing.

 

Key Dates to Remember

The levy will apply to any submissions received on or after October 20, 2024. Completed documentation must be submitted before this deadline to take advantage of the lower pre-levy fees. Incomplete or rejected submissions may be subject to the new levy if resubmitted after the deadline.

 

What About Refinancing and Mortgage Caveats?

The levy applies to property transfers and mortgage registrations and caveats that charge the land. If you’re refinancing your mortgage or placing a caveat on a property, factor in the higher levy when calculating your costs.

 

How Does Alberta Compare to Other Provinces?

Even with this new levy, Alberta’s fees remain relatively low compared to other provinces. Most Canadian provinces have a Land Transfer Tax (LTT), which can be significantly higher. For example, Alberta’s fees are estimated to be less than one-fifth of the national average and 40% lower than Saskatchewan’s, the next most affordable jurisdiction.

 

Why Introduce a Levy Now?

The Land Titles Registration Levy was introduced as part of Alberta’s 2024 Budget to generate additional revenue for the modernization of land title services and to support other key infrastructure projects, such as roads, schools, and hospitals. With Alberta’s population expected to surpass 5 million residents in the next two years, these funds will help meet the growing demand for public services.

 

Tips for Buyers and Sellers

If you’re planning to buy or sell property soon, here are a few tips to navigate the new levy:

  1. Submit Early: If possible, complete your submissions before October 20, 2024, to avoid the higher fees.
  1. Work with Professionals: Collaborate with your realtor, lender, and legal team to ensure all paperwork is completed accurately and on time.
  2. Budget for Higher Fees: If you plan to buy or refinance after the levy takes effect, factor the increased costs into your financial planning.

 

Conclusion: A Small Shift with Big Implications

While the introduction of the Land Titles Registration Levy brings higher transaction costs, it’s important to view these changes within the larger context of Alberta’s real estate market. Even with the levy, Alberta’s transaction fees remain highly competitive compared to other provinces. For those planning to invest in Calgary’s inner city, the long-term value of these properties still makes them an attractive opportunity.

If you have any questions about how this change might affect your real estate goals or need personalized advice, reach out today. I’m here to help you navigate Calgary’s evolving real estate landscape and find the perfect property that aligns with your needs and financial goals.

 

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