PEI Property Transaction FAQs

This FAQ is designed for people who are buying or selling a typical home in PEI in a standard residential transaction, usually with a mortgage.

It does not cover:

• Commercial properties
• Multi-unit residential or mixed-use properties
• Rental properties

If you are buying vacant land, the overall process is similar but there is no final walk-through or keys, and some of the due diligence is different. If you are buying a condo, the process is also similar, but there is usually more due diligence, such as reviewing condo bylaws and financials.

Every transaction has its own details. These FAQs cover common situations, but it is always best to consult with your lawyer to make sure the particularities of your transaction are understood and being appropriately addressed.

In most cases, clients contact us once they have an accepted offer (a signed Agreement of Purchase and Sale).

If you are a non-resident of PEI or a non-Canadian buyer, it can be helpful to speak with us earlier, before finalizing an offer, so we can help you navigate land-holding limits and federal restrictions.

If you are unsure at any stage, you are always welcome to reach out with your questions. It is better to have us answer a quick email early than fix a problem later on.

On a standard financed purchase, we typically:

• Review your Agreement of Purchase and Sale and any amendments, with you, and answer any questions you may have.
• Order and review a title search, including the chain of title, encumbrances, easements, rights of way, restrictive covenants, and judgments.
• Advise you about any title issues and what needs to be fixed before closing so you receive clear, marketable title.
• Coordinate with your lender, receive mortgage instructions, and prepare the loan and security documents.
• Calculate and explain adjustments such as property tax and (where applicable) fuel and rental adjustments.
• Prepare documents for the transaction (deed, bill of sale, certificate, mortgage, lender forms, statutory declarations, affidavits, statements, and authorizations among others).
• Meet with you (usually about a week before closing) to sign and to review the Statement of Adjustments, Receipts, and Disbursements.
• Arrange title insurance where applicable and complete registration of your deed and mortgage on closing.
• Handle the closing day logistics and report to you and your lender after closing.

At Golden Pines Law, our goal is not just to conduct due diligence and push papers. We aim to be responsive, available to answer questions, and to make the transaction as smooth and stress free as possible.

On a typical PEI home sale, we usually:

• Review the Agreement of Purchase and Sale and any amendments, and answer any questions you have.
• Deal with any title issues that must be resolved so you can give good title to the buyer.
• Obtain payout statements for your mortgage(s) and secured lines of credit.
• Handle property taxes and other adjustments required under the contract (leases, rentals, fuel, etc).
• Revite the deed and other conveyancing documents prepared by the buyer’s lawyer prior to your signing to transfer the property.
• Pay out the real estate commission from sale proceeds.
• Address any judgments or other registrations that must be dealt with from the sale proceeds, if applicable.
• Meet with you to sign all closing documents and review everything prior to closing.
• Complete the closing, pay off your mortgage(s), and confirm discharges are arranged.
• Send you your net sale proceeds by direct deposit so you do not have to attend at the office or bank.

Our job is to help identify and resolve issues early so the sale can close on time and with as few surprises as possible.

In PEI, most standard purchases are subject to a 1% land transfer tax (formally referred to as a real property transfer tax), unless an exemption applies.

Common exemptions include:

• Qualifying first-time home buyers
• Certain inter-family transfers
• Certain transfers following a marriage breakdown

The tax is usually calculated and paid as part of your closing costs. At Golden Pines Law, we confirm whether any exemptions apply, calculate the estimated tax, and include it in your funds to close so it is taken care of on closing day. When we are first engaged by our clients, we review all of your estimated closing costs with you so you know what to expect on your closing day.

Closing costs vary from deal to deal. For many standard PEI home purchases, total closing costs (including land transfer tax, legal fees, title insurance, and other disbursements) often fall somewhere in the range of about 1% to 3.5% of the purchase price, depending on the specifics. For a refinance you can typically expect 1-2% of the refinance amount. For a sale file, 0.5-6.5% of your selling price.

Factors that can affect closing costs include:

• Whether you qualify for a land transfer tax exemption
• Whether an IRAC application is required and the associated application fee
• The number of mortgages and the lender’s requirements
• The number of payouts, whether your lender is one of the big banks or an alternative or private lender, realtor commission, payouts, whether any title issues are needed to be rectified prior to closing, and so on.

Because each transaction is different, we do not quote “one size fits all” numbers. Once you send us your signed APS, we review your deal, then provide a clear estimate of your expected legal and closing costs, and walk you through it so there are no surprises on closing day.

For most standard residential transactions:

• Used residential housing is typically not subject to HST on the purchase price.
• Newly built homes are often subject to HST, and there may be rebates or special arrangements depending on the builder and the contract.

HST can get complicated, especially for new builds, rentals, mixed-use properties, and vacant land. The safest approach is to:

• Review the question with your accountant or tax advisor; and
• Confirm with your lawyer how HST is dealt with in your Agreement of Purchase and Sale.

Yes, non-residents of PEI can buy property here, but there are important rules.

(a) PEI land limits

Under PEI law, a person who is not a resident of the province generally cannot hold more than:

• 5 acres of land in total in PEI; or
• 165 feet of shore frontage,

unless they obtain approval through the Island Regulatory and Appeals Commission (IRAC). Many cottage and residential purchases within these limits do not require IRAC approval. For larger or waterfront properties, an IRAC application is often needed, and the application fee is typically 1% of the purchase price.

We frequently assist non-resident purchasers by reviewing whether your intended purchase exceeds the limits, preparing and submitting the IRAC application, and explaining the process and timelines.

(b) Federal restrictions on non-Canadians

Separately, federal law currently restricts some non-Canadians from purchasing certain residential property in and around areas such as Summerside and Charlottetown, subject to specific exceptions and timelines.

If you are not a resident of PEI and/or not a Canadian citizen or permanent resident, it is important to speak with a lawyer early so you understand both the provincial and federal rules before entering into a contract.

If the property is on municipal water and sewer, there are no such inspections.

If the property is on a well (non-municipal water):

• It is standard practice in PEI for the buyer to obtain a water sample and a clear water test—which includes both bacteria and chemistry tests—before closing.
• If a clear test result cannot be obtained in time, the parties will often agree to a holdback from the purchase price on closing, released once a satisfactory test is provided.

Vendors must ensure their water test that is taken is done so by an independent third party and that they do not take the sample themselves.

We have a separate article on water tests and holdbacks in PEI, which can be read here if you’d like to know more about this topic.

In PEI, standard practice is to have both a full title search and title insurance on residential purchases.

Typically:

• A title searcher reviews the previous 40 years of title, looking at the chain of ownership, encumbrances, easements, rights of way, restrictive covenants, and judgments.
• Your lawyer reviews that report, deals with any issues, and ensures the seller can give good title on closing.
• In practice, nearly all residential deals include title insurance. Any deal involving mortgage financing will have title insurance, as lenders require it.

Title insurance does not replace the need for due diligence, but it does provide an additional layer of protection. We will explain how it works in your transaction and what your policy covers.

On PEI, it is standard for buyers to do a final walk-through on closing day or the day before together with their realtor.

You use this visit to confirm that:

• The property is in the condition required by the contract.
• Any agreed repairs have been completed.
• Major items and inclusions that were supposed to remain (such as appliances) are present and appear to be in reasonable working order.

If you discover a significant problem right before closing (for example, major damage, serious cleanliness issues, or an important item removed that should have stayed), your lawyer and/or realtor can work with the other side to negotiate solutions, such as:

• A holdback from the purchase price, released once the issue is fixed; or
• A price adjustment on closing.

Smaller issues are often handled informally, but you should always let your lawyer know about any problems before you agree to close.

Most PEI-based clients sign documents in person with a lawyer here in the province. Out-of-province clients usually sign with a local notary or lawyer where they are located, and courier the originals back to PEI for closing.

As of late 2025, PEI has been working on changes that will allow more virtual signings for certain transactions with clients outside the province. Until those changes are fully implemented, assume in-person signings unless we confirm otherwise on your file.

You will typically need:

• Two pieces of ID, including one valid government-issued photo ID (such as a driver’s licence or passport); and
• One additional acceptable piece of ID (such as a major credit card or other permitted identification).

PEI health cards cannot be used as ID for these purposes.

If you will not be in PEI in the week leading up to closing or on closing day, always let your lawyer know as early as possible so they can make appropriate arrangements.

Changing a closing date may sound simple, but a lot of work is scheduled around that date.

Behind the scenes:

• Title searchers typically require around two weeks’ notice to run and complete searches.
• Lenders schedule mortgage instructions, appraisals, and funding for the agreed date.
• Sellers, buyers, movers, and utility providers may have already coordinated around that day.

Moving a closing earlier can quickly turn a smooth deal into a stressful one if the search and financing work is already underway or completed.

Before signing any amendment to change your closing date, always check with your lawyer so we can confirm it is feasible and advise you on any risks.

On every real estate file, we focus on:

• Clear cost estimates early. Once we have your signed APS (or on a refinance your lender’s instructions), we review your deal and give you a clear estimate of your total closing costs, not just legal fees.
• Responsiveness and communication. We aim to respond promptly to calls and emails and to keep you informed from accepted offer to closed.
• Modern, convenient processes. We use technology to keep things organized and efficient. On sales, we deposit your net sale proceeds directly to your account.

Our aim is to make your closing day as uneventful as possible in the best way: organized, predictable, and free of last-minute surprises.

If you already have a deal in place, please send:

• A copy of your signed Agreement of Purchase and Sale (and any amendments); and
• Your contact information.

If you do not yet have an offer in place but are thinking about buying or selling, especially if you are a non-resident of PEI or a non-Canadian buyer, you can reach out with your questions and we will help as we can.

If you do not see your question in this FAQ, you can always send it to us by email. If it is something we hear from others as well, we may add it to this page (without personal details) and let you know when it is updated.

Buying or selling a home is a big step. There are no “silly” questions, and we are happy to talk through your situation so you can move forward with confidence. Reach out to us on our Contact Us page.