Powers of municipalities

Property Transfer Duties

As indicated in section 2.1 of the Act respecting Duties on Transfers of Immovables, the tax brackets are increased each year according to the Consumer Price Index for Quebec.

Calculation of transfer duties

The amount of transfer 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 for the property acquisition, i.e. the purchase price (excluding GST and QST)
  • The amount of the consideration stipulated in the deed of sale (for example, the total selling price minus the value of furniture)
  • The property value entered on the property assessment roll multiplied by the comparative factor to take into account the real market value of the property. 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. The comparative factor for the City of Montréal for 2024 is 1.10 and 1.20 for the City of Quebec.

Second, starting from the basis of imposition established in the first step, the following must be calculated for 2024.

Tax base portions 2024:

  • 0.5% of the portion not exceeding $58,900;
  • 1% of the portion exceeding $58,900 but not exceeding $294,600;
  • 1.5% of the portion exceeding $294,600.

However, a municipality may, by by-law, determine a rate that is higher than 1.5% for any portion that exceeds $500,000. When selling a building for a sum greater than $500,000, it is therefore important to check with the municipality concerned to see whether it has adopted such a by-law. The rate set cannot exceed 3%, except for the City of Montréal.

For the City of Montréal:

  • 0.5% of the portion not exceeding $58,900
  • 1% of the portion exceeding $58,900 but not exceeding $294,600
  • 1.5% of the portion exceeding $294,600 but not exceeding $552,300
  • 2% of the portion exceeding $552,300 but not exceeding $1,104,700
  • 2.5% of the portion exceeding $1,104,700 but not exceeding $2,136,500
  • 3.5% of the portion exceeding $2,136,500 but not exceeding $3,113,000
  • 4% of the portion equal to or exceeding $3,113,000

For the City of Quebec:

  • 0.5% of the portion not exceeding $58,900
  • 1% of the portion exceeding $58,900 but not exceeding $294,600
  • 1.5% of the portion exceeding $294,600 but not exceeding $500,000
  • 2% of the portion exceeding $500,000 but not exceeding $1,000,000
  • 2.5% of the portion exceeding $1,000,000 but not exceeding $2,000,000
  • 3.0% of the portion equal or exceeding $2,000,000

Example

In February 2024, a property located in Montreal is sold for $700,000. The value of the property entered on the property assessment roll is $600,000 and the comparative factor is 1.10. The basis of imposition is therefore established at $700,000, i.e. the highest of the sale price ($700,000) and the market value of the property (Value of the property entered on the property assessment roll multiplied by the comparative factor: $600,000 x 1.10 = $660,000). The transfer duties payable to the municipality will total $9,471.00, i.e.:

  • The first $58,900 multiplied by 0.5% = $294.50
  • The following $235,700 multiplied by 1.0% = $2,357
  • The following $257,700 multiplied by 1.5% = $3,865.50
  • The $147,700 remaining multiplied by 2.0% = $2,954

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. 

For more information, do not hesitate to contact Info OACIQ.

 

Last updated on: January 04, 2024
Numéro d'article: 122375