PEI Land Transfer Tax: Rates, Exemptions, and Fees

The land transfer tax in PEI is 1% of the property’s value, payable when the deed is registered. “Value” means the purchase price or the provincial assessed value, whichever is higher. First-time home buyers who will live in the property can claim a full exemption, and transfers between close family members are also exempt. On a $400,000 home with no exemption, that works out to $4,000.

How the 1% Is Calculated

The Real Property Transfer Tax Act requires anyone registering a deed in PEI to pay 1% of the property’s value before the deed can be recorded.¹ The base is the greater of two figures: the consideration you paid, or the current assessed value on the provincial assessment roll. Consideration is not just cash. It also includes the value of any debts you assume, property you exchange, or other benefits flowing to the seller.

Buy a home for $350,000 that the province has assessed at $370,000, and you owe 1% of $370,000, or $3,700. Pay $400,000 for a property assessed at $340,000, and the tax runs off your $400,000 price. The higher-of rule stops parties from writing down the sale price to trim the tax.

When only a partial interest changes hands, the assessed value is prorated. A 50% interest in a property assessed at $300,000 uses $150,000 as the assessed-value figure for the calculation.¹

The $30,000 Floor

No tax is owed when the greater of the price or assessed value is $30,000 or less.¹ Once the value goes above $30,000, the full 1% applies to the entire amount, not just the portion over the threshold.

First-Time Home Buyer Exemption

The biggest exemption is for first-time home buyers. If you qualify, the whole 1% is waived. To claim it you must be a first-time home buyer, file a declaration to that effect at registration, and intend to use the property as your principal residence.¹

The occupancy rule has teeth. You have to actually live in the home as your principal residence for at least 183 consecutive days after registration. Fall short and you become liable for the full tax that would have been payable at registration.¹ Investment properties and vacation homes don’t qualify. And every purchaser named on the deed has to individually qualify as a first-time buyer, or the exemption fails.

Family Transfer Exemption

The Act defines “member of the family” broadly. Qualifying relationships include a parent, grandparent, child, grandchild, sibling, spouse, common-law spouse, step-relatives (step-parent, step-child, step-sibling), and in-laws (son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, sister-in-law).² A Declaration of Inter-family Transfer form has to be filed at registration.

Aunts, uncles, cousins, and nieces or nephews are not on the list, so transfers to them don’t qualify. Unlike the first-time buyer exemption, the family exemption carries no residency or occupancy requirement.

Other Exempt Transfers

Several other categories of transfer are exempt because no real change in beneficial ownership is taking place:

Estate transfers from an executor or administrator to beneficiaries under a will, or to heirs on an intestacy.
Confirmation or correction deeds that rectify or modify an existing deed without changing ownership.
Consolidation deeds transferring property to yourself to merge parcels.
Changes between joint tenancy and tenancy in common that leave the underlying ownership interests intact.
Transfers between you and a corporation you wholly own.

Watch the corporate rule. If you cease to wholly own that corporation within twelve months of the transfer, the corporation becomes liable for the tax that was originally exempted.¹ Moving land into a holding company and then selling shares inside the year triggers the full 1%.

Claiming the Exemption on the Affidavit

Every registration requires a sworn affidavit declaring the property’s value and the consideration paid. The affidavit identifies the parcel by PID, names the parties, and lists both the purchase price and the assessed value so the tax can be calculated. If you are claiming an exemption, the legal basis has to be specified on the form. Your lawyer handles the swearing and filing at closing. If you overpay, or later realize an exemption applied that you didn’t claim, you can apply to the Taxation and Property Records Division for a refund.

Registration Fees Are Separate

The 1% tax is not the only charge at registration. PEI also collects a registration fee that scales with value. For a deed of conveyance the fee is $77.25 for properties under $10,000, $103.00 between $10,000 and $20,000, $154.55 between $20,000 and $50,000, and $231.80 between $50,000 and $100,000, with higher brackets above that.³ Modest next to the transfer tax, but easy to miss when adding up closing costs.

New Construction and HST

The transfer tax is not the sales tax. If you are buying a newly built or substantially renovated home, HST at 15% applies on top: 5% federal GST plus a 10% provincial portion.⁴ Resale homes are generally HST-exempt. The GST/HST New Housing Rebate may recover part of the federal portion for qualifying primary-residence purchases, and the builder can credit it at closing. The provincial portion is not rebatable through that program.

Non-Resident Ownership Limits

Before you finalize a PEI purchase, check whether you count as a resident under the Lands Protection Act, because the answer can restrict how much land you’re allowed to buy at all. PEI is the only province with hard caps: a non-resident is limited to five acres or 165 feet of shore frontage, whichever comes first, and going over either requires a permit from the Lieutenant Governor in Council.⁵

“Resident” is defined more narrowly than most buyers expect. You have to be a Canadian citizen or permanent resident and have maintained your principal residence in PEI for at least 365 days within the 24 months immediately before the acquisition. A Canadian citizen who lives in Ontario is a non-resident for this purpose. Applications above the five-acre limit go through the Island Regulatory and Appeals Commission, and permits can come with conditions, including a requirement that the applicant become a PEI resident within a set time. If you were a resident when you acquired your land and later move away, you can keep it without applying for a permit.⁵

1
Prince Edward Island Government. Real Property Transfer Tax Act
2
CanLII. Real Property Transfer Tax Act, RSPEI 1988, c R-5.1
3
CanLII. Registry Act, RSPEI 1988, c R-10
4
Canada Revenue Agency. Stated Price Net of the GST/HST New Housing Rebate
5
Prince Edward Island Government. Lands Protection Act