When purchasing a home in Saskatchewan, it’s important for homeowners to be aware of the potential costs involved. One such cost to consider is the land transfer tax, which is a provincial tax imposed on the transfer of property ownership.
In today’s article, we will provide an overview of the land transfer tax in Saskatchewan.
What is Land Transfer Tax?
The land transfer tax is a one-time fee paid by the buyer upon acquiring a property. It’s based on the purchase price or the fair market value of the property, whichever is greater. The tax is typically due on the closing date of the property purchase.
Calculation of Land Transfer Tax
In Saskatchewan, the land transfer tax is calculated using a tiered system. The tax rates vary based on the value of the property being transferred.
Currently, the tax rates are as follows:
- Up to $1,000,000: 0.3% of the total property value
- Over $1,000,000: 0.6% of the portion of the property value above $1,000,000
For example, if you are purchasing a property valued at $500,000, the land transfer tax would be 0.3% of $500,000, resulting in a tax of $1,500.
Exemptions and Rebates
Certain transactions may be exempt from the land transfer tax, such as transfers between spouses or common-law partners. Additionally, first-time homebuyers may be eligible for a land transfer tax rebate, which can help offset the cost.
Planning for Land Transfer Tax
When budgeting for a home purchase in Saskatchewan, consider the land transfer tax as part of the overall expenses. The tax can significantly impact the total cost of homeownership, especially for more expensive properties.
Wrapping it Up: Saskatchewan Land Transfer Tax
As a Saskatchewan homeowner, understanding the land transfer tax is essential to effectively plan for the costs that come with buying a property. Being aware of the tax rates, exemptions, and potential rebates can help homeowners budget accordingly.
Call the team at City Centre Mortgages today so we can answer any other questions you have about land transfer tax.