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Alberta real estate transactions: Land transfer tax positives

Alberta seems to be one of Canada's favourite spots in which to settle down. One of the reasons for Alberta's popularity in terms of real estate transactions has to do with land transfer taxes. Most buyers tend to overlook land transfer taxes, but many are becoming more aware of the hidden costs of real estate.

A real estate web company did an analysis of 25 different areas in Canada, comparing land transfer taxes. In hot spots like Toronto and Vancouver, land transfer taxes could go as high as a little more than 2 per cent, which could increase closing costs by about $20,000 in certain instances. These amounts cannot be part of the mortgage loan. 

The largest cities in Alberta have home prices between 50 to 60 per cent less than those in Vancouver and Toronto, so the land transfer tax is about 10 per cent what they are there. In areas where sales aren't as prevalent and the market isn't as volatile, it just wouldn't make sense to add an additional burden on to already lukewarm markets. Land transfer taxes are actually money makers for cities in which real estate is booming.

An Alberta lawyer who is experienced in real estate law may be able to point out these pluses to his or her clients. Many buyers and sellers aren't up on the legalities surrounding real estate transactions. The more people know about what they're getting into when it comes to buying or selling real estate, the better it may be for them when it comes time to sign a contractual agreement.

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