Northwest Territories land transfer tax
The Northwest Territories charges a land transfer tax on the purchase of a property. The tax has two fees that together make up the total land transfer tax; they are a transfer fee and a mortgage fee.
As of 2020, the government of the Northwest Territories is transitioning to new land transfer tax rates. The transition will gradually take place through 2022. Currently, the land transfer tax is:
- 2% on the value of the property if it's worth $1,000,000 or less, with a minimum charge of $100
- If the property is worth more than $1,000,000, than a minimum fee of $1,500 will be charged. An additional 0.15% will be charged on the amount over $1,000,000.
- 1% fee on the total mortgage amount, with a minimum $80 charge
The total sum of the transfer fee and the mortgage fee make up the land transfer tax.
To illustrate how the land transfer tax would work, let's assume you purchase a property for $700,000 in Yellowknife, and you take out a $550,000 mortgage to finance the purchase. The land transfer tax would come out to $1,950; calculated as:
- $1,400 on the transfer fee ($700,000 x 0.2%)
- $550 on the mortgage fee ($550,000 x 0.1%)
- $1,950 total land transfer tax ($1,400 + $550)
If you're buying a property in the Northwest Territories, it's best to check with the Northwest Territories Land Titles Office for the most recent tax rates as they may be changing through 2022.
Northwest Territories housing market
The housing market in the Northwest Territories has slowed down over the last few years, especially in its capital city, Yellowknife.
The slowdown is primarily caused by the declining mining industry in the Northwest Territories. Several large diamond mines are approaching the end of their lifespans, which is causing mine workers to move out of the territory, thus creating an excess supply of housing with no new demand.
About the Northwest Territories (NWT)
With a population of 44,000, the Northwest Territories is the largest, by population, of Canada's three territories. It is situated between the territories of Yukon to the west and Nunavut to the east. To the south of the Northwest Territories lies the Canadian provinces of British Columbia, Saskatchewan, and Manitoba.
The climate of the Northwest Territories varies from north to south. The southern portion of the territory has a subarctic climate, while the northern part has a polar arctic climate. The territory's capital and only city, Yellowknife is located in the southern portion.
The primary industry in the Northwest Territories is mining. Tourism also plays a significant role in the territory's economy during the summer months. In the fall to winter months, tourism plays less of a role, but people still do travel to the Northwest Territories to view the northern lights (Aurora Borealis) that light up the night sky with stunning colours.
Some of the largest mining companies in the world have major diamond mining operations in the Northwest Territories. Australia based BHP Billiton and Rio Tinto each mine 100% and 29% respectively of their total diamond production in the Northwest Territories.