Settling In
PEI's Real Property Transfer Tax and Closing Costs, Explained
PEI charges 1% Real Property Transfer Tax on every deed, but first-time buyers can get it waived entirely, even before they've lived in the province long enough to normally qualify.
1. The Basic Rule
Anyone registering a deed of conveyance in PEI pays Real Property Transfer Tax equal to 1% of the greater of the purchase price or the property's assessed value. There's no tax on properties valued below $30,000, which in practice affects almost nothing on the current market.
2. The First-Time Home Buyer Exemption
You can have the tax waived entirely at registration if you meet all of the following:
- At least 18 years old
- A Canadian citizen or permanent resident
- Have never previously held a registered interest in a principal residence, anywhere in the world
- Have never previously received this exemption before
- Intend to occupy the property as your principal residence
You also need to meet one of two residency tests:
| Test | Requirement |
|---|---|
| Physical residency | Continuously maintained your principal residence in PEI for at least 6 months immediately before registration |
| Tax filing | Filed a PEI income tax return in at least 2 of the 6 tax years immediately preceding registration |
All purchasers named on the deed must individually qualify — if you're buying with a partner who has owned property before, neither of you gets the exemption.
3. If You Haven't Met the Residency Test Yet
New arrivals who don't yet meet either residency test can still pay the tax at registration and apply for a refund later, once they've occupied the home as their principal residence for 183 consecutive days. To use this route, file a notarized Declaration for First-Time Home Buyers at registration, then submit the refund application once the 183-day occupancy threshold is met.
Careful: if you claimed the exemption up front and then fail to occupy the home for 183 consecutive days, you have to pay back the tax that would otherwise have applied.
4. Other Closing Costs to Budget
| Cost | Typical amount |
|---|---|
| Lawyer fees | $800-$1,500 |
| Title insurance | $200-$350 |
| Mortgage discharge (if selling elsewhere simultaneously) | $200-$400 |
| HST on new-builds only | 15% (5% GST + 10% PST), not charged on resale homes |
5. The Practical Sequence
- Confirm with your lawyer before registration whether you qualify for the exemption outright or need the refund route.
- If using the refund route, mark your calendar for day 183 of occupancy and file promptly — this isn't automatic.
- Budget the 1% tax into your closing costs regardless, in case your situation changes and you end up needing to pay it.