Don’t Forget the Welcome Tax!
When you buy a home in Quebec, you are required to pay a Land Transfer Tax, also referred to as the “Welcome Tax” thanks to the former Quebec Minister of Municipal Affairs, Jean Bienvenue (which means welcome in French), who was responsible for instituting it. The municipality will send you an invoice in the weeks following the signing of the Deed of Sale.
The Welcome Tax is based on:
the sale price OR
the evaluation price of a property OR
the amount of the consideration stipulated in the Act of Sale, if different from the price paid (for example if given as a gift).
The Municipality will take the highest of the three as the basis for their calculations. In addition, many Municipalities are also now multiplying the base number by an extra amount, a Comparative Factor, that changes yearly. In 2023, the Comparative Factor in Vaudreuil and Hudson is 1.28%, so the Welcome Tax on a $500,000 home, for example, would be calculated on a base of $506,400 ($500,000 x 1.28% = $506,400). In Saint-Lazare, the Comparative Factor is 1.33%, so a $500,000 home would have a base value of $506,650 ($500,000 x 1.33% = $506,650).
Once the base is determined, it is broken down into increments which can vary by municipality.
The breakdown for Vaudreuil, St Lazare and Hudson is:
The first $55,200 is multiplied by 0.5%
$55,200 to $276,200 is multiplied by 1%
$276,200 to $500,000 is multiplied by 1.5%
Anything above $500,000 is multiplied by 3%
If you were to purchase a $750,000 home in Vaudreuil or Hudson, your Welcome Tax would be calculated as follows: $750,000 x 1.28% = $759,600
The first $55,200 $55,200 x 0.5% = $276
$55,200 to $276,200 ($221,000 x 1%) $2,210
$276,200 to $500,000 ($223,800 x 1.5%) $3,357
$500,000 to $759,600 ($259,600 x 3%) $7,788
and your total Welcome Tax payable would be $13,631
In comparison, the City of Montreal has extra increments with slightly different values and in 2023 the Comparative Factor is 1%.
Up to $53,200 0.5%
$53,200 to $266,200 1%
$266,200 to $532,300 1.5%
532,300 to 1,164,600 2%
1,164,600 to 2,059,000 2.5%
2,059,000 to 3,000,000 3.5%
Over $3,000,000 4%
As you can see, the total amount of the Welcome Tax can be quite high. It absolutely should be one of the costs that figure into your offer price and your moving budget along with moving costs, utility installation costs, insurance, etc. Buying a home is an exciting and happy occasion – don’t let it be ruined by an unexpected cost!
*Please note that these numbers are subject to change and can be different from one municipality to the next. Always check on the town’s website for the latest numbers. Your notary will give you the final value. The above numbers are not guaranteed by us, they are only intended as a guideline.
**The numbers above were taken from the website of each Municipality mentioned.