What is the difference between a grantor and a grantee?
The person transferring property ownership is the grantor, or the seller. The person receiving it is the grantee, or buyer.
The process of buying and selling property can be confusing, and transferring property comes with its own set of rules and requirements.
If you own real estate and want to transfer it to someone else, you’ll need to change the title on the deed to reflect that. There are two main ways to do this a quitclaim deed and a warranty deed. The one you choose depends on who you’re transferring the property to, why you’re transferring it, and what kind of tenant you are.
To sign over property ownership to another person, you’ll use one of two deeds: a quitclaim deed or a warranty deed.
What is it?
A quitclaim deed transfers any ownership interest the grantor (seller) has in the property. It doesn’t make promises about whether the title is acceptable and if anybody else owns the property. In other words, a quitclaim deed communicates, “I’m transferring to you whatever interest I have in this property, but I’m not guaranteeing anything about this claim.”
When do I use it?
When you sign a quitclaim deed, you’re effectively giving up, or quitting, your claim or rights to the property in question. No money or warranties are exchanged, so it offers a pretty low level of buyer protection. Since they’re risky, quitclaim deeds are usually used to transfer property among family members or between spouses after a divorce. They’re also used to clear up title issues, transfer property to a trust and gift property to someone.
As a seller, it safeguards you from being sued by your family member, spouse or future buyer in the event that there’s an issue with the deed or you didn’t have full ownership of the house.
Quitclaim deeds are sometimes mistakenly called “quick claim” deeds for their speed and simplicity. While that’s incorrect, it’s useful when trying to wrap your head around the concept.
What is it?
A warranty deed comes with legal assurances, as opposed to the quitclaim deed counterpart. It states that you, the seller, have the right to transfer the property and explicitly says that nobody else owns it. It also asserts that there are no debts or liens on the property. In other words, a warranty deed communicates, “I promise that I’m the rightful owner of this property and the title is in good condition.”
When do I use it?
Warranty deeds are typically used for real estate sales or between arms length buyers and sellers. They legally protect buyers from title problems. Unlike quitclaim deeds, someone who signs a warranty deed knows they won’t face unpaid taxes, ownership disputes or creditor liens later down the line.
To transfer property smoothly and successfully, follow these steps:
When you’re transferring ownership property, you’ll typically need to fill out two forms:
You can get these forms from your local recorder’s office.
The person transferring property ownership is the grantor, or the seller. The person receiving it is the grantee, or buyer.
They’re both forms of property co-ownership. When two or more people purchase property together, the attorney asks how they will hold title: as joint tenants or tenants in common.
Joint tenants have equal shares of the property with the same deed and at the same time. This type of holding title is common between married couples and family members. It can be broken if one of the tenants transfers (or sells) their interest in the property to another person. At that point, the title is converted to a tenancy in common.
With tenancy in common, the owners may have different ownership interests. For instance, Tenant 1 might own 50% of the home, while Tenant 2 and Tenant 3 each own 25%. Tenancies in common can also be granted at different times. To use the same example, Tenant 3 might obtain interest in the property years after the others signed off on the title. A tenancy in common can be broken if one or more of the co-owners sells their stake or buys out another tenant’s interest in the property, or if the property is sold.
While joint tenants and tenancy in common are similar in that the co-owners have rights and duties to the property, the key difference revolves around what happens when a co-owner dies.
When a joint tenant dies, their interest in the property is automatically — and equally — transferred to the surviving owners — the right of survivorship.
Tenants in common have no rights to survivorship. They don’t inherit any shares after a co-owner’s death. The deceased tenant’s interest in the property passes to their heirs or the people named in their will.
Transferring your rights to a property doesn’t mean you’re off the hook with fees and charges. While they vary between provinces and territories, be prepared to pay the following fees:
The only provinces in Canada that don’t charge property transfer tax are Alberta and Saskatchewan. Instead, these provinces charge a small fee when property is transferred. While land transfer taxes often end up costing several thousand dollars, the fees charged in these provinces often run between several hundred and a couple thousand dollars.
In Alberta, the fee has two components as follows:
In Saskatchewan, you don’t pay property transfer fees, but you do pay a title transfer fee. The amount is calculated as follows:
Purchase price of the property | Title transfer fee |
---|---|
$0 to $500 | $0 |
$501 to $8,400 | $25 |
Over $8,401 | 0.3% of the property value |
There is also a $160 fee for the registration of a new mortgage in Saskatchewan.
If you live in another province or territory other than Alberta or Saskatchewan, you can estimate the amount of property transfer tax using the tables below.
In most provinces and territories, property transfer tax is calculated as a percentage of the property’s value. If you don’t know the value, the asking price is the best figure to use for an estimate. Below is a table of all the rates by province or territory.
Province/territory | Purchase price & marginal tax rate |
---|---|
Ontario* |
|
Toronto, Ontario** |
|
British Columbia |
|
Manitoba |
|
Quebec*** |
|
Montreal, Quebec*** |
|
New Brunswick |
|
Prince Edward Island |
|
Nova Scotia |
|
Northwest Territories |
|
Newfoundland and Labrador |
|
Yukon | Assurance fees: Only applies when the purchase price is greater than the value of the property when it was last transferred
Transfer fees: A flat fee to transfer the title based on the purchase price of the property
Mortgage fees: A flat fee based on the value of your mortgage
|
If you’re a first-time home buyer, you may be able to get a refund on part or all of the land transfer tax you paid, depending on where you live. Oftentimes, this benefit is only available to those who have never purchased a home anywhere in the world, not just in Canada. There may also be a limit on the amount that can be refunded.
Province/Territory/City | Eligibility | Refund available |
---|---|---|
Ontario |
|
|
Toronto, Ontario |
|
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British Columbia |
|
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Prince Edward Island | First-time homebuyers are exempt from paying property transfer tax in PEI if:
Note: if there is more than one buyer, all parties must meet the above criteria to be eligible |
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Your property is an asset, and transferring ownership can be time consuming. There are a few paths to take, but quitclaim deeds are commonly used to turn over any interest you have to a trusted person, like a family member or friend.
To learn more about the ins and outs of property ownership, check out our comprehensive guide to mortgages.
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