On February 29, 2024, Alberta’s Minister of Finance introduced Alberta’s 2024 Funds, and in reference to this announcement, the Authorities of Alberta printed its Fiscal Plan for the 2024 – 2027 interval. On this Fiscal Plan, the Province outlined their proposal for the introduction of what they’re calling a brand new “Land Titles Registration Levy”, which seems to be largely a easy enhance of the present land registration charges. At the moment, the Alberta Land Titles Workplace prices a base registration charge of $50 along with a variable cost of $2.00 per $5,000 of property worth (for transfers of land) and $1.50 per $5,000 of principal (for mortgages). The Land Titles Registration Levy would greater than double (and even triple within the case of mortgages) these variable prices to $5.00 per $5,000 for transfers and mortgages alike.

This charge hike follows a previous enhance that got here into impact in early 2020 shortly earlier than the COVID-19 pandemic, however regardless of these two will increase in comparatively quick succession, the associated fee to convey or mortgage actual property in Alberta stays, by a reasonably broad margin, the bottom of all comparator provinces. The under is a tough comparability of the land registration prices throughout among the bigger provinces within the nation:

^{* Please be aware that the above are approximations, as sure municipalities in these provinces impose surcharges or supply exemptions which will alter these numbers.}

On account of vital efforts within the latter half of 2023, a lot of the registration backlog on the Alberta Land Titles Workplace (which reached peak delays of as much as a number of months) has now been eradicated. As referenced within the Province’s 2024 – 2027 Fiscal Plan, the variety of registrations the Land Titles Workplace churned by means of as a way to clear this backlog resulted in vital tax income for the Province in 2023, and the implementation of this Land Titles Registration Levy seems to be a minimum of partially supposed to offset the losses in tax income related to the comparatively decrease variety of registrations anticipated for 2024, whereas additionally funding improved help for the LTO in order that it could higher deal with elevated demand sooner or later.

The Land Titles Registration Levy, although nonetheless comparatively inexpensive, is one thing that every one purchasers and debtors might want to think about and funds for going ahead. The particularly heavy enhance to mortgage registration prices is one thing debtors specifically might want to ponder when seeking to refinance their present loans with new lenders, with these debtors needing to weigh each (i) the elevated mortgage registration prices beneath the Land Titles Registration, and (ii) any relevant prepayment penalties related to closing out their mortgage with their present lender.

Whereas neither the Province’s Funds nor its Fiscal Plan specify exactly when the brand new Land Titles Registration Levy will come into impact, the Province does be aware that laws implementing these modifications and introducing the efficient date is predicted to be introduced ahead within the spring of 2024. Given the Fiscal Plan additionally outlines anticipated elevated tax income of $45 million for the 2024-25 interval attributable to the brand new Land Titles Registration Levy, it’s affordable to anticipate that the Levy will come into impact later this 12 months or in early 2025.

We’re happy to reply any questions you could have in respect of the upcoming Land Titles Registration Levy, merely contact the authors of this weblog or one other member of Lawson Lundell LLP’s Actual Property Group.