Property Transfer Duties
Under the Act respecting Duties on Transfers of Immovables, every municipality must collect duties on the transfer of any immovable situated within its territory. These property transfer duties are better known as the ''Welcome Tax'' in reference to the Minister of Municipal Affairs who introduced this law.
Calculation of transfer duties
These duties which are payable by the buyer of the property, is calculated in two steps:
First, the basis of imposition for transfer duties must be established, which will be the greatest of the three following amounts:
- the price paid (excluding GST and QST);
- the amount of the consideration stipulated in the act of sale, if different from the price paid;
- the market value of the property at the time of its transfer, i.e. the value entered on the property assessment roll multiplied by the comparative factor. You should not look only at the comparative factor indicated on the tax account since it could differ from what is on the property assessment roll. The tax account does not reflect the comparative factor established for the first fiscal year to which the roll applies. The comparative factor may be amended for subsequent fiscal years.
Second, starting from the basis of imposition established in the first step, the following must be calculated:
- 0.5% of the first portion not exceeding $50,000;
- 1% of the portion exceeding $50,000 but not exceeding $250,000;
- 1.5% of the portion exceeding $250,000;
- 2% of the portion exceeding $500,000 (only on the territory of the City of Montréal)*;
- 2.5% of the portion exceeding $1,000,000 (only on the territory of the City of Montréal)*.
For more information on property transfer duties payable during a transaction, feel free to contact the municipality concerned. For the city of Montreal, contact the district concerned, dial 311 (on Montreal Island) or 514-872-0311 (elsewhere) or send an email.
A property is sold for $265,000. The value of the property entered on the property assessment roll is $260,000 and the comparative factor is 1.02. The basis of imposition is therefore established at $265,200, i.e. the highest of the sale price ($265,000) and the market value of the property (Value of the property entered on the property assessment roll multiplied by the comparative factor: $260,000 x 1.02 = $265,200). The transfer duties payable to the municipality will total $2,478, i.e.:
- The first $50,000 multiplied by 0.5 = $250
- The following $200,000 multiplied by 1 = $2,000
- The $15,200 remaining multiplied by 1.5 = $228
For more information, do not hesitate to contact the OACIQ Info Center by email at firstname.lastname@example.org or by telephone at 450-462-9800 or 1-800-440-7170.
* The Act respecting Duties on Transfers of Immovables allows the city of Montreal to increase, by by-law, its tax rate for an immovable valued at more than $500,000. In this regard, the By-law no. 10-007-1 amending the By-law concerning transfer duties applicable to transfers whose basis of imposition exceeds $500 000 came into force on December 28, 2011.