Changes Coming to Land Titles

Be extra careful with June closings!

Land Titles fees increase dramatically effective July 1, 2015. On a $500,000.00 purchase with a $400,000.00 mortgage, the increase will be $940. There will also be an increase in search fees, although those amounts have not been published as yet.

If you are looking for a possession date in late June, be careful that title is registered before July 1, 2015. Otherwise, the new fees will kick in. Hopefully June will be a busy time for closings. At busy times there may be many delays. So try to make sure your possession is 2 weeks or so before the end of the month. You do not want to have a June 30th closing and end up having to pay the extra $940.00 in registration costs because that registration did not go through in time.

With June closings, you have to be aware of property tax adjustments as well.

Property tax adjustments:

Unless the property is registered for tax payments through TIPPS, then in Calgary the taxes for the calendar year must be paid in full by the end of June. Once the sellers have paid the taxes for the year, the buyers must reimburse the sellers on closing for the tax adjustment to the date taxes are pre-paid for, namely December 31, 2015. Sellers who are paying their taxes through their mortgage company will have had the 2015 taxes paid out by their bank before month end. Some banks pay them out around June 15 so the buyers will have to reimburse the sellers for the rest of the year.

For example:

-Taxes are $4,000.00 per year

-A real estate deal has a June 30 closing (that is, in the middle of the year)

-Taxes were paid by the sellers’ bank for the year on June 20, 2015

-Result: the buyers need another $2,000.00 up front to close the purchase just for the tax adjustment.

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