How Much Is the Real Property Transfer Tax in New Brunswick?

If you are buying a home in New Brunswick, the transfer tax is one of the closing costs that surprises people. It is not based only on what you agreed to pay.

This article explains the rate, what it is applied to, how to work it out, and the exceptions that can change the result.

This article covers the law of New Brunswick.

The rate and what it applies to

Under the Real Property Transfer Tax Act, for deeds tendered on or after April 1, 2016, the tax is 1% of the greater of the consideration for the transfer or the assessed value of the real property.

Assessed value means the value of the property at the time of registering a deed, taken or extrapolated from the current assessment list. So the province compares the price paid with the assessed value and taxes the higher one. A price below assessment does not lower the tax.

Consideration is a legal word for what is given in exchange for the property, which in most purchases is the price you agree to pay. If that figure and the assessed value differ, the higher of the two is the number that matters for this tax.

Worked examples

In the first row the price is higher, so the tax is 1% of $300,000, or $3,000. In the second the assessed value is higher, so the tax is 1% of $250,000, or $2,500.

The tax is rounded to the nearest dollar, with fifty cents treated as one dollar.

To work it out yourself, find both figures, pick the larger one, and take 1% of it. Because of the rounding rule, the final amount is a whole dollar figure.

Who pays and when

The tax is payable by every person who tenders a deed for registration in the province, and it must be paid before the deed is registered. For electronic deeds, it is paid electronically as the Minister approves. How the cost is shared between you and the other party depends on the facts of your deal, so it is worth confirming with a lawyer.

Electronic instruments can be submitted only by subscribers, who are Law Society of New Brunswick members authorized to practise law and who have an agreement with Service New Brunswick, apart from stated exceptions. Paper submission is allowed in limited cases, such as when a registered owner submits the instrument personally. Whether you need a lawyer for your closing also depends on your lender and on registration practice, so it is worth confirming with a lawyer.

The transfer tax is a one-time cost at registration, and it is separate from your yearly property tax bill. Service New Brunswick assesses each property annually with values as of January 1, and the bill combines local and provincial rates, each applied per $100 of assessed value. For that annual property tax, the amount owed is the assessed value divided by 100, multiplied by the local rate plus the provincial rate. Each person in whose name real property is assessed must pay the taxes on it.

Exceptions and special cases

• Partial interests: the transferred share's percentage is applied to the assessed value when computing the tax.
• Exempt instruments: no tax is payable on registration of certain instruments, including leases under 25 years, wills, certain transfers from estates to beneficiaries or heirs, transfers to registered charities, transfers to the Crown and its agencies, transfers made only to secure a debt, and other classes exempted by regulation.
• No first-time buyer exemption appears in the Act as read.
• Several registry offices: where a deed can be registered in more than one registry office, the tax is payable only once, on the first transfer tendered.
• Older agreements: lower earlier rates of 0.5% (June 1, 2012 to March 31, 2016) and 0.25% before that are kept for agreements for sale or purchase signed before specified dates.

Whether one of these exceptions applies depends on the exact instrument and the facts of your transfer, so it is worth confirming with a lawyer before you assume the tax is reduced or does not apply.

If the tax is wrong or unpaid

The Minister may assess or reassess within one year of registration where a false statement was made or no assessed value was determined. Unpaid tax bears interest and can be registered as a lien.

This is one reason to make sure the figures in your closing documents match the assessment record. If something looks off, raise it before the deed is registered rather than after.

What to do next

• Look up the property's assessed value through Property Assessment Online using the address, PAN or PID.
• Compare it with your purchase price and apply 1% to the higher figure.
• Add the tax to your closing budget.
• Ask who pays it under your agreement of purchase and sale.
• Check whether any exemption could apply to your transfer.

When you search, keep in mind that the PID is a land-parcel identifier, separate from the PAN used for assessment and taxation. Land Titles uses the PID to uniquely identify parcels of land and to record interests in that land.

The Act can be amended, so a lawyer can confirm the current rules for your closing.

Frequently asked questions