Are First-Time Buyers Exempt From Newfoundland and Labrador Deed Fees?

If you are buying your first home, you may have heard of land transfer tax rebates in other provinces and wonder whether Newfoundland and Labrador has something similar. The short answer is that there is no land transfer tax here, and also no first-time buyer exemption from the deed registration charge.

This article explains what the charge is, how it is calculated, when you pay it, and which federal programs may help a first-time buyer instead.

This article covers the law of Newfoundland and Labrador.

No land transfer tax, but a registration charge

Newfoundland and Labrador has no land transfer tax. Instead, section 5 of the Services Charges Act imposes a land registration charge payable to the Crown for registering a conveyance of land, a notice of mortgage or an assignment of a lease of land in the Registry of Deeds.

Because the charge is tied to registration rather than to who you are, your first-time buyer status does not change it. The only exemption confirmed is that no fee is payable on registration of a deed or other instrument by or on behalf of the Crown. Section 5 lists no other exemption.

How the deed registration charge is calculated

The charge is $100 where the value of the land does not exceed $500. Where the value exceeds $500, it is $100 plus $0.40 for each additional $100 or part of $100. It is paid at the time of registration, and the same formula applies to an assignment of a lease of land. The conveyance charge states no maximum, so it keeps rising with the value of the land.

For example, on $300,000 the value above $500 is $299,500, which is 2,995 blocks of $100; 2,995 times $0.40 is $1,198, plus the $100 base. Check the Registry of Deeds online fee calculator for the current figure on your purchase.

The mortgage registration charge

If you finance the purchase, registering the notice of mortgage carries its own charge. It is $100 where the indebtedness secured does not exceed $500, and above that, $100 plus $0.40 for each additional $100 or part of $100 secured. A $240,000 mortgage works out to $1,058.

Unlike the deed charge, the mortgage charge is capped at $5,000, a limit reached at roughly $1.2 million of secured debt.

Once a notice of mortgage is registered, you may ask the mortgagee for a full copy of the mortgage, which must be provided within 30 days. This matters because the registry may show only a notice of mortgage rather than its full terms.

Why the fee must be paid, and help that does exist

An instrument sent for registration must be accompanied by the proper fee, and the registrar may not register it unless the fee is first paid. Registration matters because an instrument that is not registered can be judged void against a later purchaser or mortgagee for value who registers first.

First-time buyers do have federal programs, none of which reduces this provincial charge:

• Home Buyers' Amount: a non-refundable federal credit based on up to $10,000 for a qualifying home, with no refund if no tax is payable.
• Home Buyers' Plan: a withdrawal of up to $60,000 from RRSPs toward a qualifying home, which can be combined with a First Home Savings Account withdrawal.
• First-Time Home Buyers' GST/HST rebate: for new or substantially renovated homes only, not resale homes.

For the Home Buyers' Amount, you or your spouse or common-law partner must have acquired a qualifying home registered in your name, you must not have lived in another home that you or your spouse or partner owned in the year of acquisition or the four preceding years, and you must intend to occupy the home as a principal residence within one year of acquiring it. The first-time buyer test does not apply to a person eligible for the disability tax credit, or to a home bought for a related person who is eligible, if the purchase makes the home more accessible or better suited to that person's needs. The rules for the other programs differ, so confirm each one before you rely on it.

What to do next

• Estimate the deed charge using the formula or the government online calculator.
• Add the mortgage registration charge if you are borrowing.
• Ask your lawyer for a written estimate of all closing costs before closing day.
• Confirm which federal programs you qualify for and keep the paperwork for your tax return.
• Keep your fee money available in advance, since registration cannot proceed without it.

The Registry of Deeds says it is advisable to engage a lawyer to prepare the documents to ensure compliance and facilitate registration. Paper documents must include a registration application form, and documents without it are returned unprocessed. Once registered, registration is notice to anyone who later claims an interest in the land.

Frequently asked questions