2024 Changes to Alberta Land Titles Registration Fees
The Alberta government is proposing some BIG changes that could impact home buyers’ closing costs.
In the 2024 budget announcement, the Alberta government has put forward substantial revisions to the land title registration fees. These modifications are set to significantly increase the costs associated with land transfers and mortgages registration.
Here's what's changing:
One of the most notable alterations is the replacement of the current variable fee structure with a new system. Under the existing framework, property transfers incur fees of $2 per $5,000 of property value, alongside $1.50 per $5,000 of mortgage value. However, the incoming reforms will introduce a streamlined approach, with a flat rate of $5 per $5,000 of property value.
To put this into perspective, let's consider a hypothetical scenario:
Home Purchase Scenario:
→ You are purchasing a $450,000 home with a 10% down payment
→ With the proposed fee structure changes, the fees for this home would be $955
→ That is an increase of $553.50 from the current fee structure
While the provincial government is quick to point out that these costs still remain relatively lower than those in other provinces, it's crucial to note the context. Alberta's comparative affordability is largely due to the absence of a property transfer tax, a feature present in provinces such as Ontario and British Columbia. Therefore, despite the favourable comparison, the impending fee hike is undoubtedly significant for potential buyers.
How to make sure you're prepared?
Although no one wants to spend an extra $500-$1000 when they are purchasing a new home, it’s important to be prepared for this increase when the fee changes come into affect. At Spire, we coach our clients to keep additional funds available for moving expenses and other closing costs . Where we would normally coach clients to set aside $2500 ish, now we'll be coaching them to be prepared for an outlay between $3000-$3500.
The proposed legislation to enact these fee changes is expected to be introduced in spring 2024. As the implementation draws nearer, stakeholders across the real estate sector will be monitoring developments closely, preparing for the impact of these reforms on property transactions and market dynamics.
