How property transfer duties are calculated

Last updated December 22, 2021
Reading time: 2 min

Would you like to buy a building in Montréal? Would you like to understand how the duties (also called  the “welcome tax”) are calculated? Find out everything you need to know.

In general, property transfer duties are calculated by multiplying:

  • The tax base
  • Rates that depend on property value

Tax base

The tax base corresponds to the highest of the following three amounts:

  • The amount paid for the building transfer, which generally corresponds to the building’s selling price, excluding PST and QST.
  • The amount stipulated for the building transfer, which generally corresponds to the price listed in the deed of sale.
  • The building’s market value, which corresponds to the value that appears on the assessment roll at the time of transfer multiplied by the comparative factor that is in effect.

Calculating property transfer duties is not necessarily based on the selling price of the building.

Market value and comparative factor

While the property transfer duties are calculated using the building’s market value, the tax base is calculated by multiplying:

  • The value of the building that appears on the property assessment roll.
  • The city’s comparative factor that was in effect at the time of sale.

The comparative factor brings the real estate transaction price to a basis that is comparable to the market value.

Montréal’s comparative factors are as follows:

Year

Comparative factor

2022

1.18

2021

1.06

2020

1.00

Rates by value brackets

Property transfer duties are calculated according to value brackets that correspond to certain rates. These brackets, sometimes called thresholds, change every year.

In Montréal, the value brackets from January 1 to January 31, 2022, are as follows:

Tax base value

Rate

Up to $53,200

0.5%

$53,200 to $266,200

1%

$266,200 to  $527,900

1.5%

$527,900 to  $1,055,800

2%

$1,055,800 to $2,041,900

2.5%

Higher than $2,041,900

3%

Calculation example

Here’s an example of calculation with a tax base of $660,000:

  • $53,200 x 0.5% = $266.00
  • $213,000 x 1% = $2,130.00
  • $261,700 x 1.5% = $3,925.50
  • $132,100 x 2% = $2,642.00

The amount payable for property transfer duties would be $8,963.50.

As of February 1, 2022, an additional bracket for any tax base equal to or greater than $3 M is created and subject to the rate of 4%. The rate applicable for the portion of value from $ 2,059,000 is raised to 3.5%.

Tax base value as of February 1, 2022

Rate

Up to $53,200

0.5 %

$53,200 to $266,200

1%

$266 200 to $532 300

1.5%

$532,300 to $1,064,600

2%

$1,064,600 to $2,059,000

2.5%

$2,059,000 to $3,000,000

3.5%

Higher than $3,000,000

4%

In Montréal, the value brackets for 2021 were as follows:

Tax base value

Rate

Up to $52,800

0.5%

$52,800 to $264,000

1%

$264,000 to $527,900

1.5%

$527,900 to $1,055,800

2%

$1,055,800 to $2,041,900

2.5%

Higher than $2,041,900

3%

Calculation example

Here’s an example of a 2021 calculation with a tax base of $660,000:

  • $52,800 x 0.5% = $264.00
  • $211,200 x 1% = $2,112.00
  • $263,900 x 1.5% = $3,958.50
  • $132,100 x 2% = $2,642.00

For a building that was sold in 2021, the amount payable for property transfer duties would be $8,976.50.

Pay your property transfer duties

Did you receive a bill for property transfer duties? This invoice is payable in one instalment within 30 days of the billing date.