How much house can I afford in Prince Edward Island?
PEI uses the national GDS (39%) and TDS (44%) limits at the stress-test rate. Its real property transfer tax is 1% of the greater of price or assessed value, $3,500 on a $350,000 home, but qualifying first-time buyers are fully exempt with no price cap. Every purchaser must qualify, including a six-month residency test. There's no sales tax on the CMHC premium.
Worked examples use 4.12%, the Bank of Canada's average effective rate on new insured 5-year-plus fixed mortgages (2026-08), and are recalculated whenever our rules or rates are updated.
What's different about buying in PEI
Among the provinces that charge a transfer tax, Prince Edward Island is the only one whose first-time buyer relief has neither a price cap nor a dollar limit. The province charges a real property transfer tax of 1%, but a qualifying first-time buyer is fully exempt, with no price cap in the Act. Ontario's refund stops at $4,000; BC's exemption ends at $860,000. PEI's covers the whole tax.
PEI does not charge sales tax on the CMHC premium. How much you can borrow follows the national rules: GDS up to 39% and TDS up to 44%, both at the stress-test rate.
PEI real property transfer tax
The rules, from the Real Property Transfer Tax Act (consolidated to May 29, 2026):
- Rate: 1% of the greater of the purchase price or the assessed value.
- Low-value exemption: no tax if that greater value is $30,000 or less.
- First-time home buyer exemption: full exemption, with conditions (below).
On a $350,000 home, a repeat buyer pays $3,500. A qualifying first-time buyer pays nothing. Because the rate is flat, each extra $10,000 of price adds $100 for a repeat buyer and nothing for a qualifying first-time buyer. Compared with first-time buyers in two other provinces:
| Example price | PEI, repeat buyer | PEI, first-time buyer | BC, first-time buyer | Ontario, first-time buyer |
|---|---|---|---|---|
| $250,000 | $2,500 | $0 | $0 | $0 |
| $350,000 | $3,500 | $0 | $0 | $0 |
| $500,000 | $5,000 | $0 | $0 | $2,475 |
| $750,000 | $7,500 | $0 | $5,000 | $7,475 |
| $1,000,000 | $10,000 | $0 | $18,000 | $12,475 |
Who qualifies for the first-time exemption
The Act sets conditions on the buyer, not the price. To qualify you must:
- be a Canadian citizen or permanent resident;
- meet a six-month PEI residency test, or have filed a PEI tax return;
- never have held an interest in a principal residence; and
- live in the home for 183 consecutive days.
Every purchaser must qualify. If you buy with a partner who has owned a home before, the exemption doesn't apply and the full 1% is due. On a $500,000 home that is the difference between $0 and $5,000.
If you're moving to PEI
The residency condition means a first-time buyer relocating from another province may not qualify straight away. The test is six months of PEI residency, or a PEI tax return. If you're buying soon after you arrive, budget for the 1% tax and treat the exemption as a possible saving rather than a certainty, and ask your lawyer how the test applies to your dates.
Federal help that stacks with the exemption
PEI's exemption saves the transfer tax. Federal programs help with the down payment and other costs, and you can use them as well:
- FHSA: contribute up to $8,000 a year, $40,000 in total toward a first home.
- RRSP Home Buyers' Plan: borrow up to $60,000 per person from your RRSP.
- Home buyers' amount: a $10,000 non-refundable credit, worth $1,400 for 2026.
- First-time GST rebate: up to $50,000 on a new home, in full up to $1,000,000.
For a couple who both qualify, the FHSA and Home Buyers' Plan limits apply to each of you: up to $80,000 of FHSA contributions and $120,000 of Home Buyers' Plan withdrawals between you, subject to each program's own rules.
A PEI affordability example
A first-time buyer household earning $90,000, with a $30,000 down payment (closing costs come on top), $350 a month of other debts and an example rate of 4.12% over 25 years. With an example 0.75% property tax and $100 a month for heat, the lender maximum is about $411,600 (GDS). A qualifying first-time buyer pays $0 of transfer tax; a repeat buyer at the same price would pay $4,116. A 30-year insured amortization would lift the maximum to about $436,600.
| Household income | Down payment | Maximum price | Transfer tax, repeat buyer | Cash to close, first-time | Cash to close, repeat |
|---|---|---|---|---|---|
| $65,000 | $20,000 | $281,200 | $2,812 | $22,700 | $25,512 |
| $90,000 | $30,000 | $411,600 | $4,116 | $32,700 | $36,816 |
| $120,000 | $50,000 | $562,500 | $5,625 | $52,700 | $58,325 |
| $155,000 | $80,000 | $749,900 | $7,499 | $82,700 | $90,199 |
Cash to close is the down payment, any transfer tax and our $2,700 planning estimate for legal fees, title insurance and an inspection. The exemption doesn't raise how much you can borrow, but it leaves more of your savings for the down payment or an emergency fund.
Next steps
- Run your numbers in the affordability calculator with PEI selected and your property's tax rate.
- Check the full bill in the closing costs calculator, with first-time buyer ticked only if every buyer qualifies.
- Add federal help from first-time home buyer programs: the FHSA and the Home Buyers' Plan stack with PEI's exemption.
Run the numbers for Prince Edward Island
This calculator starts with Prince Edward Island's transfer tax and first-time relief. Open your full affordability plan set to Prince Edward Island.
Closing costs and land transfer tax calculator
Cash you need on closing day on top of your down payment.
| PEI real property transfer tax (1%) | $6,500 |
|---|---|
| PEI first-time home buyer exemption | −$6,500 |
| Legal / notary | $1,800 |
| Title insurance | $350 |
| Inspection / appraisal | $550 |
| Total | $2,700 |
Estimate, not advice. Your lawyer or notary prepares the final statement of adjustments, including property-tax and utility adjustments not shown here.
Closing costs $2,700, of which land transfer tax or fees $0.
Assumptions & sources
Assumptions
- Transfer tax is calculated on the purchase price (NB, PE and NS use the greater of price or assessed value).
- First-time buyer rebates assume you meet every condition (residency, occupancy, never owned).
- Legal, title insurance and inspection figures are our planning estimates; get quotes.
Sources
Frequently asked questions
How much is land transfer tax in PEI?
1% of the greater of the purchase price or the assessed value, so $3,500 on a $350,000 home. Properties valued at $30,000 or less are exempt.
Do first-time buyers pay transfer tax in PEI?
Not if every purchaser qualifies. PEI's first-time home buyer exemption is a full exemption with no price cap, for citizens or permanent residents who meet the residency test, have never held a principal-residence interest and live in the home for 183 consecutive days.
Can I get PEI's first-time exemption if my partner owned a home before?
No. All purchasers must qualify, so one buyer with previous ownership makes the full 1% payable.
How much house can I afford in PEI on $90,000?
About $411,600 with $30,000 down, $350 a month of other debts, an example 4.12% rate over 25 years and an example 0.75% property tax.
Primary sources
- Government of Prince Edward Island — Real Property Transfer Tax Act. Checked .
- CMHC — Calculating GDS / TDS. Checked .
- OSFI — Minimum qualifying rate for uninsured mortgages (Guideline B-20). Checked .
- CMHC — Homeowner mortgage loan insurance: Purchase (eligibility). Checked .
- CMHC — Home Start: 30-year amortization for first-time buyers and new builds. Checked .