How property transfer duties are calculated
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.
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 | |
|---|---|---|
2021 | 1.06 | |
2020 | 1.00 | |
2019 | 1.04 |
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 for 2021 are 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.
The value brackets for 2020 are as follows:
Tax base value | Rate |
|---|---|
Up to $51,700 | 0.5% |
$51,700 to $258,600 | 1% |
$258,600 to $517,100 | 1.5% |
$517,100 to $1,034,200 | 2% |
$1,034,200 to $2,000,000 | 2.5% |
Higher than $2,000,000 | 3% |
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