EARLY TRANSFER OF LAND ON NEW BUILDS

We have a high land transfer tax in Manitoba. It is so high that people will sometimes go to some effort and expense to avoid at least some of it. One method used by buyers of “new builds” is to transfer the lot at an earlier time in the building process, so they only pay land transfer tax on the value of the lot, not on the entire value of the lot with a new house on it. The idea is simple enough, the lawyer transfers the lot to the buyer just after the contract is signed so the land transfer tax is only payable on the lot value, instead of waiting until the house is built and then doing the transfer on the value of the lot and the house together. The difference can be $2,000.00- $7000.00 in land transfer tax depending on the value of the house and lot. Some, but not all, new build contracts take this into account and have a standard clause that allows this. Often the vendor (builder), or whomever owns the lot, will take a caveat out or have...

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