NWT land title fees set to increase over three MLAs’ objections

The fee you pay to transfer land in the Northwest Territories will shortly increase, despite several MLAs questioning the rationale behind the NWT government’s decision.

Louis Sebert, the justice minister, defended the move in the legislature on Monday.

The fee is ordinarily paid by buyers. At the moment, you pay $1.50 for each $1,000 if the overall transaction is worth less than $1 million.

Assuming an omnibus bill amending several justice-related acts becomes law, as is now almost certain, that fee will rise over the next three years (beginning in January 2020) to $2 per $1,000 – a 33 percent increase.

That means if you’re buying a home worth $500,000, you would currently pay a $750 land transfer fee but will, in 2022, pay $1,000.

One Yellowknife realtor appeared to term the fee increase a “cash grab” before later deleting their tweet.

In the legislature, two Yellowknife MLAs opposed the increase as they felt their constituents would bear too much of the burden.

After Sebert had acknowledged the lion’s share of revenue would come from transactions in Yellowknife, Cory Vanthuyne, the MLA for Yellowknife North, said: “The constituents I represent will have difficulty with this.”

When fellow MLA Kieron Testart asked Sebert how the NWT government justifies the increase, Sebert replied: “The fees had not been changed in many, many years and we thought it wise to update the fees.”

The fee has been untouched since 1994. However, the passage of time as a sole reason for the update did not convince Testart.

“I’m not opposed to new taxes as long as they are married to very clear policy objectives,” said the Kam Lake MLA, citing legislation in British Columbia which directs money from purchases of more valuable homes to support social programming.

Testart continued: “I cannot support a fee increase that is going to disproportionately affect my constituents for the sole policy reason of raising more revenue for the government.”

He and Vanthuyne were joined by Tom Beaulieu, the outgoing MLA for Tu Nedhé-Wiilideh, in attempting to vote down the increase. However, they were the only three to oppose the measure and were defeated.

“I find it a bit rich that my colleagues are here now excoriating the minister for phasing in this fee increase when that was the agreement that we came to,” Julie Green, the Yellowknife Centre MLA, said in response to her colleagues.

“If someone can afford $500,000 for a house, they can afford an additional $350 for the land transfer tax,” said Green, slightly overstating what would actually be an additional $250 according to the Department of Justice, which checked the figure on Tuesday.

For property worth more than $1 million, the rules are slightly different.

What is currently a $1 per $1,000 fee for properties valued at more than $1 million will become $1.50 over the three-year period, while the minimum fee for those properties will increase to $2,000.

The fee increase is seen as a replacement for the territory’s earlier, ultimately abandoned, proposal to introduce a land transfer tax. The tax was forecast to raise around six times the revenue that the increased fees will bring in.

Sebert suggested raising fees rather than introducing the tax was “a reasonable compromise.”