Welcome Tax Increases in Montréal

The Act respecting duties on transfers of immovables allows Ville de Montréal, by by-law, to raise its taxation rate for immovables with a value of more than $500,000.
Every municipality must collect duties on the transfer of any immovable situated within its territory. These land transfer duties are better known as the “Welcome Tax” ( Put in place by M.

Bienvenu). The buyer’s are liable for paying such tax.

The buyer pays the greatest of the following amounts:

  • The price paid;
  • The amount of the consideration stipulated in the act of sale, if different from the price paid;
  • The market value of the property at the time of its transfer, i.e. the value entered on the property assessment roll multiplied by the comparative factor.

    • After establishing the first step, the following must be calculated:

  • 0.5% of the first $50,000
  • 1% of the next $50,000 to $250,000
  • 1.5% of any portion exceeding $250,000
  • 2% of the portion exceeding $500,000 (for the City of Montréal)
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    pic for Feb09.10

    Example:
    A property is sold for $265,000. The value of the property entered on the property assessment roll is $260,000 and the comparative factor is 1.02.

    The basis of imposition is therefore established at $265,200, i.e. the highest of the sale price ($265,000) and the market value of the property (Value of the property entered on the property assessment roll multiplied by the comparative factor: $260,000 x 1.02 = $265,200)

    The transfer duties payable to the municipality will total $2,478, i.e.:

  • 0.5% of the first $50,000 = $250
  • 1% of the next $50,000 to $250,000 = $2,000
  • 1.5% of the portion exceeding $250,000 = $228


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    This entry was posted on Tuesday, February 9th, 2010 at 2:25 pm and is filed under Home Buying, Real Estate Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    2 Comments »

    Comment by duart

    “Welcome Tax”? Actually, this is a mistake.

    Its accurate name is “F_ck You Tax”, meaning that we are delighted to have you as a new neighbour in our community, and we do appreciate receiving whatever extra you may have in your bank account. We will stop by to welcome you with flowers and a bottle of cheap wine, of course. This is our way of showing how much care for you, our new neighbour! Welcome!!

    So, f_ck you very much and have a nice day.

    Posted on February 5, 2011 at 12:10 pm

    Comment by Frank

    FYI

    Posted on February 19, 2011 at 11:29 am

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