The welcome tax: the exact calculation, in Quebec and Montreal

The welcome tax is the only purchase cost that arrives after you've moved in. It doesn't go through the notary, it doesn't get added to the mortgage, and the bill often lands at the exact moment the account is empty. On a $500,000 purchase in Quebec, it comes to $5,654. Here is how that figure is reached, and why yours may differ.

It's also the most misquoted cost around, almost always as “about 1.5% of the price”. That shortcut is wrong in both directions: it has a first-time buyer at $269,000 setting aside $1,652 too much, and it hides $2,869 from a Montreal buyer at $1,300,000.

A stack of brackets, not a percentage

It works like income tax: each rate applies only to the portion of the price that falls in its bracket. Nobody pays 1.5% on the whole thing. Here is what a $500,000 purchase really looks like, anywhere in Quebec:

The rate actually paid here is 1.13%. The lower the price, the more the shortcut overshoots: on $269,000, it says $4,035 instead of $2,383.

Montreal plays in another league

A city is allowed to add its own brackets above the provincial table. Montreal has: the two tables are identical up to $552,300, then the Montreal rate keeps climbing, up to 4% on the priciest properties. The darker part below is what Montreal adds:

On $1,300,000, the address costs $4,715 more in Montreal than elsewhere in Quebec. Other cities have also raised the rate on the portion above $500,000. The only table that counts is the one for the city where the building stands.

The base isn't always the price you paid

This is the part almost nobody knows, and the one that produces the nasty surprises. The tax is calculated on the highest of three amounts: what you paid, what the deed of sale declares, and the market value as the law defines it.

That market value is the municipal assessment (the price the city puts on the building to calculate your property taxes) multiplied by the comparative factor, a multiplier the city publishes each year to bring an assessment that is often three years old closer to real market prices.

When the bill arrives

1. Signing day

   You pay nothing. The tax isn't on the notary's statement.

2. 3 to 6 months later, sometimes more

   The city mails you the bill directly. The delay varies from one city to the next and is counted in months.

3. 30 days to pay

   A single payment, usually. It can't be added to the mortgage, unlike the CMHC premium.

Hence the useful habit: work out the amount before you make your offer, park it in a separate account, and forget about it until the bill shows up. It's the easiest expense to forget, precisely because it's the only one that doesn't show up on signing day.

When you don't pay it

The law provides exceptions. The most common: a transfer between spouses (married, in a civil union, or common-law under the conditions set out), between parents and children or grandparents and grandchildren, in either direction, and from a person to a company they control at least 90% of.

Several cities, Montreal among them, also refund all or part of the amount to first-time buyers or families. Those are separate programs, with their own conditions, and they change regularly. Check your city's at the time of purchase, and don't count on the refund until it has arrived.

Work out yours

The Atlas mortgage calculator applies both tables to the price you enter and adds the tax to the rest of the cash to plan for: notary, inspection, and the QST on the CMHC premium if your down payment is under 20%. Free, no account. The brackets drawn above are the 2025 ones and come from the same constants as the tool.

For the full list of costs between the listed price and the real cheque: What a home really costs in Quebec.

This article explains a calculation. It doesn't replace the advice of your notary, who is the person who will see your deed and the building's assessment.