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)
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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