The Hidden Costs of Buying a Home in PEI (Beyond the Down Payment)

If you're buying a home [check out our buyer services page] in Charlottetown — or anywhere on PEI — you've probably done the math on your down payment, maybe priced out a moving truck, and figured you had your budget covered. Then a few days before closing, your lawyer sends over a document with a handful of line items you've never heard of, and suddenly you're wondering if you have enough cash to actually close.

This happens to almost everyone. So let's go through it before you're staring at that document wondering what half of it means.

Inspections

The total cost of the inspection can vary depending on the size of the home but generally right now, this is the cost of a full home inspection. In addition to the home inspection, if the property is rural and not on municipal sewer, a septic inspection is a good idea.

• Home inspection: around $700

• Septic inspection (if the property's on a septic system): around $700

These aren't legally required, but I push for them every time. A few hundred dollars now is a lot cheaper than finding out about a furnace has an air lock — or a failing septic field — after you already own it.

Land Transfer Tax

If you're not a first-time buyer, PEI charges a land transfer tax of 1% of the purchase price. First-time buyers are exempt — so if this is your first home, cross this one off your worry list. [Worth double-checking the exemption qualifiers haven't changed before this goes live.]

This one's worth flagging early, because on a $450,000 home, 1% is $4,500. It's not a small number, and it's not optional if you've owned property before.

IRAC Approval for Out-of-Province Buyers

This one's specific to relocation buyers, and it catches people by surprise. If you're not a PEI resident and you're buying 5+ acres or 165+ feet of waterfront frontage, the purchase needs approval from the Island Regulatory and Appeals Commission (IRAC).

That approval comes with its own cost: 1% of the purchase price, plus roughly $1,500–$2,000 in additional legal fees to handle the application. This is a range as it can vary depending on the law firm but when I spoke with several different lawyers at the beginning of 2026, they all fell in that range.

If you're moving to PEI from away and have your eye on a larger property or a place with real water frontage, this is a cost to ask about early — not something to discover after you're already under contract. In fact, it can be a determining factor if your offer on a property is accepted so it cannot be something that is added later as the IRAC application greatly effects the timeline of the transaction as well.

The Fuel Adjustment

Here's one that surprises a lot of buyers: on PEI, it's standard practice to buy a property with the fuel tanks full. That's actually the fair way to do it — full tanks are the only way for anyone to know exactly how much fuel is being purchased, instead of guessing at what's left. So at closing, you reimburse the seller for the cost of that fuel at the closing day’s current fuel price.

This can add up more than people expect, especially if the home has both an oil tank and propane tanks. [Personal experience talking here — I had one oil tank and two propane tanks on my last home purchase, and that adjustment was not small.] It's not a hidden fee exactly, but it's also not something most buyers think to budget for until they see it on the statement.

If you're buying a home heated by oil or propane, ask your REALTOR® early what heating system the property uses — it changes how much cash you'll need on hand at closing.

Statement of Adjustments (this is the one nobody explains)

When your lawyer finalizes the deal, they prepare what's called a Statement of Adjustments — basically the math that splits costs fairly between you and the seller based on the exact closing date. The other pieces that show up most often:

• Land transfer tax — calculated right into this statement, if it applies to you

• Title insurance — protects you against title issues that didn't turn up in the lawyer's search

• Legal fees — your lawyer's fee for handling the closing

• Deed registration — the cost to register the deed with the province

• Mortgage registration — the cost to register your mortgage, if you're financing

• Title search — checking the property's legal history

• Real estate disbursements — small admin costs like document production and registry copies

• HST on the taxable items above

None of these are PEI-specific scams or hidden fees — they're just standard parts of any property closing in the province, bundled into one document so your lawyer can show you exactly what you owe and what you're getting back.

How Much Should You Actually Budget?

There's no single number that fits every purchase — it depends on the purchase price, whether you're a first-time buyer, whether IRAC approval applies, and what the home is heated with. That's exactly why this document exists: to give you the real number for your specific deal before you're standing at the lawyer's office.

The best move is to ask your lawyer for an estimated Statement of Adjustments as soon as you're a few weeks out from closing, so there are no surprises on closing day.

Why this matters

None of this is hidden on purpose — it's just not necessarily the stuff that gets talked about when you're house hunting. Your lawyer will walk you through the actual numbers on your Statement of Adjustments before closing, and I always tell buyers to ask questions on anything that doesn't make sense. There's no dumb questions on closing day.

If you're working through your own first-time buyer budget, check out my First-Time Buyer Tips.
And if you're relocating to PEI and want the full picture before you move, here's my guide to buying from out of province.

Quick FAQ

Do I have to get a home inspection in PEI?
No, it's not legally required, but it's strongly recommended — especially on older homes or anything with a well or septic system.

Is land transfer tax the same for everyone?
No — first-time buyers in PEI are exempt. Everyone else pays 1% of the purchase price.

What is IRAC approval and who needs it?
Non-resident buyers purchasing 5+ acres or 165+ feet of waterfrontage need approval from PEI's Island Regulatory and Appeals Commission, which adds 1% of the purchase price plus roughly $1,500–$2,000 in legal fees on top of standard closing costs. To be considered a resident of PEI, you must have resided full-time in the province for 12 of the past 24 months.

Why do I have to pay for fuel that's already in the tank?
Because the tank comes full at closing — it's the standard, fair way to handle fuel costs on PEI, since a full tank is the only way to know exactly how much fuel is being transferred. The seller ensures that the tank is full just before closing and then you pay for a full tank. They provide a receipt to their lawyer proving that they had the tank topped up. As the buyers agent, we also ensure that the tank is full at our final walk through.