The Saskatchewan real estate landscape is set to undergo significant changes as the Information Services Corporation (ISC) recently announced an increase in their fees for land transfer and mortgage registration. This news warrants immediate attention from both real estate professionals and prospective home buyers alike.
ISC Fee Adjustments – A Detailed Breakdown
Some of the costs in the ISC fee structure are being increased incrementally, while some are entirely new. Additionally, the formula for how these fees are calculated has been changed, adding another layer of complexity to the mix.
The repercussions will be felt by clients who have received quotes for closings post July 29, 2023, as the increase in costs may be material, requiring a revision of these quotes. This will be especially applicable in the case of purchase transactions, with higher value properties bearing the brunt of the increase in financed transactions.
What are the Changes?
- Transfer of Titles: The fee for transferring titles has increased from 0.3% of the property value to 0.4%. For instance, for a property valued at $300,000, the transfer fee would previously have been $900. Under the new structure, the fee is $1,200.
- Mortgage Registration Costs: The fee for registering a mortgage has undergone a significant revamp. Previously, a flat fee of $180 was charged for the first four titles, with an additional $55 for every subsequent title. The new fee structure is more nuanced and depends on the value of the mortgage being registered.
- Mortgage Discharges: Mortgage discharges will now attract a fee of $55 per full or partial discharge. Previously, these discharges were free of charge.
- Title Searches and Abstracts: The fees for detailed title searches and abstracts are also being increased from $12 to $15.
To top it off, these fee adjustments from ISC come right on the heels of the Bank of Canada’s decision to increase their key interest rate. This one-two punch is sure to make things more expensive for borrowers.
Impact on Transactions
To comprehend the impact of these changes, consider these three examples:
- A property valued at $250,000 with a $200,000 mortgage registered against it will now face an additional $259 in fees due to the increase in land transfer costs and title searches.
- A property worth $600,000 with a $520,000 mortgage registered against it would face an increase of $956, factoring in the additional costs for land transfer, mortgage registration, and title searches.
- A sale involving two surface parcel titles and two uncertified mineral titles with a mortgage registered against each, will be costlier by $67, considering the extra charge for discharging the mortgage and the increase in title search costs.
The changes also require mortgage brokers to tread carefully when registering a collateral charge on a property. The value at which they register can impact the cost of registration. Banks often register for the value of the purchase price or more, even when lending less. Unfortunately, this could mean higher costs for borrowers.
These recent changes announced by ISC have the potential to significantly reshape the real estate industry. Whether you’re a borrower, broker, or a real estate professional, it’s important to stay abreast of these changes, recalibrate your calculations, and reassess your strategies accordingly.
For those considering a mortgage in Saskatchewan or seeking advice related to real estate financing, feel free to reach out at Ron@RonQMortgage.ca for a no-fee pre-approval. Stay informed and proactive in navigating this ever-evolving real estate landscape.