Real Property Transfer Tax First-Time Home Buyers Exemption

This section provides information on eligibility for a waiver of Real Property Transfer Tax where the real property is being purchased by first-time home buyers.

What is the Real Property Transfer Tax first-time home buyers exemption?

Real Property Transfer Tax that normally applies to the registration of a deed of conveyance in Prince Edward Island may be waived if the buyer, as specified on the deed, is a first-time home buyer.

What does “first-time home buyer” mean?

Under the Real Property Transfer Tax Act a “first-time home buyer” is a buyer who meets all of the following criteria:

As of the date a deed which transfers real property containing a residence to the buyer is registered, the buyer as specified on the deed:

  • Is either:
    1. a Canadian citizen, or
    2. a permanent resident as defined in the Immigration and Refugee Protection Act (1.5 Mb) (Canada);
  • Has either:
    1. continuously maintained his or her principal residence in the province throughout a period of not less than six months immediately before the registration date, or
    2. been subject to tax under clause 3(a) of the Income Tax Act and has filed a return under the Act in at least two of the six taxation years immediately preceding the registration date;
  • Has not previously held a registered interest in real property in any jurisdiction that constituted the individual’s principal residence; and
  • Has not previously obtained a first-time home buyer’s exemption.

Are all first-time home buyers eligible for the first-time home buyers exemption?

To qualify for this exemption, first-time home buyers must complete the Declaration – First-time Home Buyers form and have it signed by a notary public or a commissioner for taking affidavits.

Within the Declaration – First-time Home Buyers form the property owner must sign an oath that states:

  1. That the purchaser of the subject property is at least 18 years of age;
  2. That the purchaser is a Canadian citizen or a permanent resident as defined in the Immigration and Refugee Protection Act (1.5 Mb) (Canada);
  3. That the purchaser has maintained a principal residence in the province throughout a period of not less than six months immediately prior to the registration date, or have been subject to tax under clause 3(a) of the Income Tax Act RSPEI 1988, Cap I-1 and have filed a return under the Act in at least two of the six taxation years immediately preceding the registration date or the purchaser has occupied the subject property as their principal residence for a period of six months following the registration of the deed;
  4. That the purchaser has not previously held a registered interest in real property, in any jurisdiction, that constituted a principal residence;
  5. That the purchaser has not previously obtained a first-time home buyer exemption; and
  6. That the purchaser intends to occupy or use the real property as their principal residence as defined in the PEI Real Property Transfer Tax Act.

Under subsection 5(1)(b) of the Real Property Transfer Tax Act, principal residence means the usual place where an individual makes his or her home.

What happens if I am a first-time home buyer but I have not resided in the province for 183 consecutive days prior to purchasing the home?

If a purchaser is not eligible for the first-time home buyer exemption at the time of registration of a deed of conveyance because the purchaser did not meet the 183 consecutive day residency requirements, the purchaser is eligible for a refund of the Real Property Transfer Tax upon occupying the real property as his or her principal residence for a period of at least 183 days immediately following the date the deed of conveyance is registered.

How do I apply for a refund of Real Property Transfer Tax upon meeting the 183 consecutive day residency requirements?

Applicants must complete a Request for Refund of Real Property Transfer Tax form and submit as directed on the form. The notarized Declaration - First-time Home Buyers form must be attached to the Request for Refund of Real Property Transfer Tax.

Are there situations where a first-time home buyer must forfeit the exemption and pay the tax?

If Real Property Transfer Tax has been waived at the time of registration of a deed of conveyance and the first-time home buyer does not occupy or use the real property as their principal residence for a period of at least 183 consecutive days following the date of registration, the buyer must forfeit their exemption and pay the tax that would have been payable at the time of registration.

If there is more than one purchaser of the property and one or more of the purchasers do not qualify as a first-time home buyer, is the property subject to Real Property Transfer Tax?

Yes. All purchasers of the property must qualify as first-time home buyers in order to receive the tax exemption.

Who should I contact if I have questions about the Real Property Transfer Tax first-time home buyers exemption? 

Taxation and Property Records
Phone: (902) 368-4070
Fax: (902) 368-6164
Email: taxandland@gov.pe.ca

 

Disclaimer: This page is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this page and the statutes, the statutes shall prevail.
Published date: 
May 17, 2017
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Taxation and Property Records
1st Floor Shaw South, 95 Rochford Street
PO Box 2000
Phone: 902-368-4070
Fax: 902-368-6164

taxandland@gov.pe.ca