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

It is the one buying cost that arrives after you have moved in. It does not go through the notary, it cannot be rolled into the mortgage, and the bill tends to land exactly when the account has been emptied by everything else.

It is also the most misquoted cost in Quebec, almost always as "about 1.5% of the price". That shortcut is wrong in both directions: it makes a first-time buyer at $269,000 set aside $1,652 too much, and it hides $2,869 from a Montreal buyer at $1,300,000. Here is the real calculation.

A stack of brackets, not a percentage

Exactly like income tax: each rate touches only the portion of the price that falls inside its bracket. Nobody pays 1.5% on the whole thing — this is what a $500,000 purchase actually looks like, anywhere in Quebec.

The rate actually paid here is 1.13%. And the lower the price, the wider the gap: on $269,000 the shortcut announces $4,035 instead of $2,383.

Montreal plays in another league

A city may stack its own brackets on top of the provincial floor. Montreal did: the two tables are identical up to $552,300, after which the Montreal rate keeps climbing — up to 4% on the most expensive properties. Below, the dark part of each bar is what Montreal adds:

On $1,300,000, the address alone costs $4,715 more in Montreal than elsewhere in Quebec.

And Montreal is not alone: other cities have raised the rate on the portion above $500,000. These are municipal by-laws — the only table that governs is the one of the city where the property sits.

The base is not always the price you paid

This is the part almost nobody knows, and the one that produces the bad surprises. The duty is computed not on the sale price but on the highest of three amounts: what you actually paid, what the deed states, and the market value as the act defines it — the municipal assessment on the roll, multiplied by the comparative factor the city publishes each year.

When the bill arrives

1. Signing day

   You pay nothing. The welcome tax is not on the notary's closing statement.

2. Three to six months later, sometimes more

   The city bills you directly. The delay is measured in months, not days, and varies from one city to the next.

3. Thirty days to pay

   A single instalment, as a rule, and it cannot be financed: it will not go on the mortgage the way the CMHC premium does.

Hence the useful habit: work the amount out before you make an offer, and leave it aside until the bill shows up. It is the easiest buying cost to forget, precisely because it is the only one that does not appear on signing day.

When you do not pay it

The act provides exemptions. The most common cover transfers between spouses (married, civil union, or de facto under the stated conditions), in the direct line — parent or grandparent to child, and the reverse — and from a person to a company they control with at least 90% of the voting rights.

Several cities, Montreal among them, also run home-purchase assistance programs that refund part or all of the amount to first-time buyers or families. Those are separate subsidies with their own conditions, revised regularly: check the program in force in your city at the time of purchase, and do not budget the tax as though the refund were already yours.

Work out yours

The Atlas mortgage calculator applies both tables to the price you enter and adds the transfer duty to the rest of the cash due at closing: notary, inspection, and the Quebec sales tax 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 the tool uses, not from a hand copy.

For the full list of costs between the listed price and the real cheque, we laid it out in What a Quebec home actually costs.

This article explains a calculation; it does not replace your notary's advice — they are the one who will see your deed and the property's assessment roll.