When buying a home in Prince Edward Island, the land transfer tax (also called the real property transfer tax) is one of the largest closing costs you will face. PEI calculates this tax using marginal rates based on the purchase price. On the average PEI home price of approximately $360,000, the land transfer tax would be about $3,925.
How much is land transfer tax in Prince Edward Island?
Land transfer tax in PEI is calculated using a marginal rate structure similar to income tax brackets. Each portion of the purchase price is taxed at a progressively higher rate:
| Purchase Price | Marginal Tax Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
The buyer is always responsible for paying land transfer tax in PEI.
PEI land transfer tax examples
Here are example calculations at common PEI home prices:
Land transfer tax on a $300,000 home
| Bracket | Amount | Rate | Tax |
|---|---|---|---|
| First $55,000 | $55,000 | 0.5% | $275 |
| $55,001 to $250,000 | $195,000 | 1.0% | $1,950 |
| $250,001 to $300,000 | $50,000 | 1.5% | $750 |
| Total | $2,975 |
Land transfer tax on a $400,000 home
| Bracket | Amount | Rate | Tax |
|---|---|---|---|
| First $55,000 | $55,000 | 0.5% | $275 |
| $55,001 to $250,000 | $195,000 | 1.0% | $1,950 |
| $250,001 to $400,000 | $150,000 | 1.5% | $2,250 |
| Total | $4,475 |
Land transfer tax on a $500,000 home
| Bracket | Amount | Rate | Tax |
|---|---|---|---|
| First $55,000 | $55,000 | 0.5% | $275 |
| $55,001 to $250,000 | $195,000 | 1.0% | $1,950 |
| $250,001 to $400,000 | $150,000 | 1.5% | $2,250 |
| $400,001 to $500,000 | $100,000 | 2.0% | $2,000 |
| Total | $6,475 |
Quick reference: LTT at various PEI home prices
| Home Price | Land Transfer Tax | After First-Time Rebate |
|---|---|---|
| $200,000 | $1,725 | $0 |
| $250,000 | $2,225 | $0 |
| $300,000 | $2,975 | $0 |
| $368,000+ | $3,995+ | $0 (max rebate reached) |
| $400,000 | $4,475 | $475 |
| $500,000 | $6,475 | $2,475 |
| $600,000 | $8,475 | $4,475 |
PEI first-time homebuyer land transfer tax rebate
Prince Edward Island offers a first-time homebuyer land transfer tax rebate of up to $4,000. This rebate can fully cover the land transfer tax on homes valued at approximately $368,000 or less.
To qualify, you must:
- Be a first-time homebuyer (not owned a home anywhere in the world previously)
- Occupy the home as your primary residence
- Be at least 18 years of age
The rebate is applied at closing and reduces the total amount of land transfer tax owed. For homes priced above $368,000, the first $4,000 of LTT is covered and you pay only the remainder.
For example, on a $500,000 home with $6,475 in LTT, a first-time buyer would pay only $2,475 after the $4,000 rebate.
How PEI land transfer tax compares to other provinces
| Province | LTT on $400,000 Home |
|---|---|
| PEI | $4,475 |
| Ontario | $4,475 |
| British Columbia | ~$6,000 |
| New Brunswick | ~$4,000 |
| Nova Scotia | ~$6,000 |
| Saskatchewan | $0 (no LTT) |
| Alberta | $0 (no LTT) |
PEI’s land transfer tax is roughly in line with Ontario’s rates but higher than New Brunswick. Saskatchewan and Alberta do not charge a land transfer tax at all.
How to avoid paying land transfer tax in PEI
There are a few situations where land transfer tax may not apply:
- Property transfers between spouses
- Property transfers of farmed land between family members
- Property transfers to a family business corporation
- Certain court-ordered transfers
It is important to consult a legal professional to confirm whether an exemption applies to your situation.
Budgeting for your PEI home purchase
Land transfer tax is just one of several closing costs to plan for. When buying in PEI, also consider:
- Down payment — use the down payment calculator to see minimum requirements
- Mortgage insurance — required if less than 20% down; use the mortgage insurance calculator
- Mortgage payments — estimate monthly costs with the PEI mortgage payment calculator
- Affordability — the PEI mortgage affordability calculator shows how much home you can afford
- Current rates — check PEI mortgage rates for the latest offers
Frequently asked questions
How much is land transfer tax in PEI?
PEI land transfer tax uses marginal rates from 0.5% to 2.5%. On a $400,000 home, the total LTT would be $4,475.
Is there a first-time homebuyer rebate in PEI?
Yes. PEI offers a rebate of up to $4,000 for first-time homebuyers, which can fully cover LTT on homes up to approximately $368,000.
Who pays land transfer tax in PEI?
The buyer is responsible for paying land transfer tax at the time of property registration.
Related guides
- PEI mortgage rates
- PEI mortgage affordability calculator
- PEI mortgage payment calculator
- Ontario land transfer tax calculator
- Down payment calculator
- Land transfer tax calculator
