Does Newfoundland and Labrador Have a Land Transfer Tax?

If you are moving here from another province, or buying your first home, you may be used to a land transfer tax that takes a big bite out of your closing costs. It is natural to ask whether Newfoundland and Labrador has one too.

The short answer is no, but there is a registration charge that works a bit differently. This article explains what it is, how it is worked out, and where the exceptions are, so you can plan your budget.

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, 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.

In plain words, you are not taxed on the act of buying. You pay a charge when the paperwork is registered. The charge is paid at the time of registration, and the Registrar may not register an instrument unless the proper fee is first paid.

Registration matters beyond the charge itself. Registration constitutes notice to anyone later claiming an interest in the land, and an instrument is considered registered when delivered if the registrar finds it compliant, which fixes the time of registration and priority. An instrument that has not been proved and registered is judged fraudulent and void against a later purchaser or mortgagee for value who registers first.

How the deed registration charge is calculated

For a deed (conveyance), the charge is $100 where the value of the land does not exceed $500. Where the value is higher, it is $100 plus $0.40 for each additional $100 or part of $100. The same formula applies to an assignment of a lease of land.

The formula states no maximum, so the charge keeps rising as the value of the land rises. Here are two examples worked from the formula.

These are arithmetic examples only. The Registry of Deeds provides an online fee calculator for a conveyance or notice of mortgage, so check it for the current figure before closing.

The mortgage registration charge and its cap

If you finance the purchase, registering the notice of mortgage carries its own charge. It is $100 where the debt secured does not exceed $500. Above that, it is $100 plus $0.40 for each additional $100 or part of $100 of the debt secured. For example, a $240,000 mortgage works out to $958 plus $100, or $1,058.

Unlike the deed charge, the mortgage charge is capped at $5,000, and the Companies and Deeds Online site repeats that the maximum fee to register a mortgage or charge on property is $5,000. By arithmetic, the cap is reached at roughly $1.2 million of secured debt.

Exceptions and other costs to know about

• No fee is payable on registration of a deed or other instrument by or on behalf of the Crown, and the Services Charges Act lists no other exemption.
• An instrument sent for registration must be accompanied by the proper fee.
• Registration fees are listed in the Schedule of Fees, and the minister can set the fees the registrar collects.

Paper documents for registration must be originally signed and witnessed by a person authorized to administer an oath, otherwise an affidavit of execution is needed, and they must include a registration application form and an accurate written property description. Documents without the form are returned unprocessed. The Registry of Deeds says it is advisable to engage a lawyer to prepare the documents to ensure compliance and facilitate registration.

Registration charges are not your only closing costs, and some federal programs may help. The federal Home Buyers' Amount is a non-refundable credit based on up to $10,000 for a qualifying home, and it is a federal credit only. You can also withdraw up to $60,000 from RRSPs under the Home Buyers' Plan. Eligibility rules apply to each, so confirm them with the Canada Revenue Agency or an accountant.

If you are buying a new or substantially renovated home, the federal First-Time Home Buyers' GST/HST Rebate may also apply. It covers 100% of the GST, or the federal part of the HST, on a home valued up to $1 million, and it does not apply to resale homes.

What to do next

• Check the Registry of Deeds online fee calculator using your purchase price and mortgage amount.
• Add both the deed charge and the mortgage charge to your closing-cost budget.
• Ask your lawyer to confirm the exact registration charges before closing day.
• If you are a first-time buyer, ask an accountant whether the federal credits apply to you.
• Keep your receipts for registration charges with your closing documents.

Frequently asked questions