Alberta has introduced a new Land Transfer Registration Levy which came into effect at the end of October. This means that next time you buy a property, you can expect the legal fee portion of your closing costs to be higher than you’re used to.
For many years, Alberta has enjoyed the “Alberta advantage” of not having a land transfer tax—a common fee in other provinces. While this levy isn’t technically a tax, it does act as an additional revenue source for the provincial government. In addition to helping modernize the Land Titles and Surveys system, the levy will help fund projects like roads, schools, and hospitals.
Here’s a quick summary of the two key changes that come with the new levy:
- For transfers of land, the variable fee will increase from $2 per $5,000 in property value to $5 per $5,000
- For mortgage registrations and caveats that charge the land, the variable charge will increase from $1.50 per $5,000 of mortgage value to $5 per $5,000
While these increases might surprise some Albertans, it’s worth noting that overall registration fees in Alberta remain significantly lower than in most other provinces. In fact, according to Service Alberta, the new fees are still less than one-fifth the national average and only 40% of the cost in Saskatchewan. The fees do NOT change on the selling side of the transaction, only the buying side.
New Costs for Legal Fees
At RiverLife, transparency is important to us, which is why we’ve broken down the impact of the new levy on legal fees. Our in-house lawyer, Derek Cougle of Cougle & Co., has provided the following examples of what you can expect to pay. The Land Titles Office (LTO) will comprise a chunk of the legal fee but you are also obviously paying for your lawyer’s time (normally a flat fee for real estate transactions in comparison to other types of law that charge by the hour) as well as disbursements which can include a couple hundred dollars for photocopies, couriers, pulling land titles, admin fees, etc. If you are calling around for quotes from different law offices, make sure to compare apples to apples, not just the flat fee for the lawyer themselves. As you can see, a purchase with a mortgage pays quite a bit more in legal due to the larger LTO costs.
| Transaction Type | Old LTO Costs | Old Legal All-in | New LTO Costs | New Legal All-in |
|---|---|---|---|---|
| Condo purchase with 95% mortgage ($350,000) | $339.75 | ~$1,750 | $782.50 | ~$2,190 |
| House purchase with 90% mortgage ($700,000) | $569.00 | ~$1,970 | $1,430.00 | ~$2,830 |
| House purchase with no mortgage ($700,000) | $330.00 | ~$1,700 | $750.00 | ~$2,120 |
| House purchase with 80% mortgage ($1,200,000) | $868.00 | ~$2,290 | $2,260.00 | ~$3,690 |
| House purchase with no mortgage ($1,200,000) | $530.00 | ~$1,900 | $1,250.00 | ~$2,620 |
These changes don’t affect the process of buying a home. When you meet with your lawyer a week or two before possession day, they will walk you through all the numbers. Your lawyer will help make adjustments for things like property tax, HOA fees, condo fees, etc, and can help you set up property tax payments going forward. Then, they work with your lender to collect the funds and send over your mortgage money on possession day.
If you have questions about the new fee structure, feel free to reach out to Derek Cougle and his team at Cougle & Co. They’re here to guide you through the process and answer any questions you may have.
Even with the new levy, Alberta’s costs are still among the lowest in Canada, so while the increase may take some getting used to, the overall cost of buying a home here remains affordable. If you’re ready to move forward with your real estate plans, we’re here to help.
Parker
