In response to the recent real estate downturn and oil price decline, certain changes were introduced, including the recent soaring fees in land title and mortgage registrations in Alberta.
However, this came as a bit of surprise. Effective July 1, registration fees for real estate Calgary will increase 3 to 4 times the present level.
According to Service Alberta Minister, Stephen Khan, some experts told him that there's a lot of room for growth for taxes and fees in Alberta, compared with that of other provinces, and having the lowest fee structure is not really sustainable.
The flat fee part of the registration fee runs from $50 to $75. However, for the variable part or per-dollar fee, the increase will run to as much as 6 times the present level.
An illustration of this increase is a $500,000 home purchase and a $400,000 mortgage taken on it. At present, its land title will cost the buyer $150 and a mortgage registration fee of $140, so total cost is $290.
With the upcoming increase, land title would cost the buyer $675 and a mortgage registration fee of $555. So total cost is now $1,230.
This is just a portion of the home price and there are still other costs for the buyers like legal fees, home inspection and such others. According to Kang, Liberal MLA, this set-up will not help home sales.
The last rate increase in real estate fees for Alberta was in 2011. And although the upcoming registration fee increase in the province makes it near the national average, it's still way below the fees paid by buyers in other provinces.
However, since the oil price decline, the Calgary real estate market has been adversely affected.