PEI Closing Costs Explained

What are closing costs in Prince Edward Island?

Closing costs are the additional expenses required to legally complete the purchase of a property. In PEI, buyers should generally budget approximately 1.5% to 3% of the purchase price, depending on the property type, financing, and eligibility for exemptions.

Common PEI closing costs

• Real Property Transfer Tax (land transfer tax)
• Legal fees and lawyer disbursements
• Home inspection
• Title insurance
• Property tax and utility adjustments
• Survey (sometimes required)
• Moving and connection costs

Real Property Transfer Tax (land transfer tax)

One of the largest closing costs for PEI buyers is the Real Property Transfer Tax, often referred to as land transfer tax.

The tax is typically 1% of the greater of the purchase price or the assessed value for properties over $30,000. For example, on a $400,000 purchase, the transfer tax would normally be $4,000.

First-time home buyers may qualify for a full or partial refund if certain conditions are met, such as occupying the property as a principal residence. Eligibility depends on individual circumstances.

I always review this with buyers early in the process so they know exactly what to budget for.

Legal fees and disbursements

Legal fees cover the work required to complete your purchase, including title searches, registration, mortgage documentation, and closing paperwork.

Disbursements are additional costs your lawyer pays on your behalf, such as title searches, registrations, and administrative fees.

Home inspections

While not mandatory, a home inspection is strongly recommended for most PEI buyers. Inspections can identify issues with structure, heating systems, plumbing, roofing, and more.

The cost varies by property size and inspection scope but is paid directly to the inspector before closing.

Adjustments: a cost buyers often overlook

Adjustments are prorated expenses paid to the seller at closing. These costs vary by property and can include:

• Property taxes
• Heating oil or propane
• Condo fees
• Water or utility balances

Because adjustments can differ significantly from one home to another, I review them with buyers before conditions are removed to avoid surprises.

Title insurance and surveys

Many PEI lenders accept title insurance instead of requiring a new survey. Title insurance is a one-time cost that protects against issues such as boundary defects, encroachments, or title errors.

Some properties, particularly rural or waterfront homes, may still require a survey depending on lender requirements.

Frequently asked questions about PEI closing costs

How much should I budget for closing costs in PEI?

Most buyers should budget approximately 1.5%–3% of the purchase price, depending on the property and eligibility for transfer tax exemptions.

Do first-time buyers pay land transfer tax in PEI?

Many first-time buyers qualify for a refund of the Real Property Transfer Tax if they meet eligibility requirements and occupy the home as their principal residence.

When are closing costs paid?

Closing costs are typically paid on or just before possession day through your lawyer as part of the final statement of adjustments.

Can closing costs be included in my mortgage?

In most cases, PEI buyers pay closing costs separately from their mortgage, although limited exceptions may apply depending on the lender.

Do I need both a survey and title insurance?

Often no. Many lenders accept title insurance instead of a new survey, though some properties may still require one.

Need help estimating your closing costs?

Every property is different, and closing costs can vary more than buyers expect. Getting an accurate estimate early helps you plan confidently.

If you’re buying in Prince Edward Island and want a personalized closing cost estimate, contact Jodi Bernard, REALTOR® with Century 21 Northumberland Realty.