A few months after buying a home, new homeowners receive a letter from their municipality. And surprise! Inside is the notice for the real property transfer tax—better known as the “welcome tax.” Understanding how this amount is calculated and what steps are involved can help you plan ahead and budget more effectively when preparing to purchase a property.
What is the real property transfer tax?
The real property transfer tax is an amount collected by Quebec municipalities whenever the ownership of a property within their territory is transferred. Introduced in 1976, this tax helps fund a portion of municipal services. The terms “welcome tax,” “real property transfer tax,” and “property transfer duties” all refer to the same charge.
Although receiving the bill may come as a surprise, this tax is a normal part of the homebuying process in Quebec. Under the Act respecting duties on transfers of immovables, the welcome tax applies to various types of property transfers, including sales, assignments, donations and exchanges involving buildings or land. The tax is generally payable in a single payment (lump sum).
Why is it called the “welcome tax”?
Although “welcome tax” is a translation of the French term “taxe de bienvenue,” it wasn’t named after former minister Jean Bienvenue, according to historian Frédéric Lemieux (in French only). The story likely gained traction because of the coincidence between his name and the timing of the law’s introduction. In reality, the term is believed to have originated with notaries, who used it to make the concept of paying transfer duties when purchasing a property easier to understand and accept.
How is the welcome tax calculated?
From Montreal to Trois-Rivières and all the way to Gaspé, new homeowners shouldn’t expect to pay the same amount. Each municipality applies its own comparative factor, which means the welcome tax can vary from one city to another.
Determining the tax base
To calculate the welcome tax, the municipality must first determine the tax base (in French only). This is defined as the highest of the following three amounts:
The purchase price of the property (for a new home, GST and QST are excluded).
The selling price stated in the transfer deed.
The market value of the property at the time of transfer. This generally corresponds to the value recorded on the property assessment roll, adjusted using the comparative factor in effect in the municipality on the date of transfer.
Did you know? The comparative factor is specific to each municipality and updated annually. It’s used to adjust the assessed value so that it better reflects the property’s real market value.
For example, here are the comparative factors used by the City of Montreal in recent years:
2026: 1.00
2025: 1.08
2024: 1.10
2023: 1.00
For a property with a municipal assessment of $450,000, Montreal would apply a comparative factor of 1.00 in 2026. The estimated market value would therefore remain $450,000 ($450,000 × 1.00). If this amount is higher than the purchase price or the value stated in the deed of sale, it becomes the tax base.
Calculating by value brackets
Once the tax base has been determined, the percentages are calculated using progressive rates based on value brackets for the specific municipality. All municipalities must apply the basic rates. For 2026, these are:
0.5% on the first $62,900
1.0% on the bracket from $62,901 to $315,000
1.5% on the amount exceeding $315,000
For any amount over $500,000, municipalities have the option of applying higher rates. These rates are capped at 3%, with the exception of Montreal, which may set even higher rates. Because the rates can vary, it’s important to check with the municipality to determine the exact rates that apply.
1.5% on the bracket from $307,800 to $500,000
2.5% on the bracket from $500,000 to $750,000
3% on the amount exceeding $750,000
* Applicable thresholds for 2026 (in French only)
1.5% on the bracket from $315,001 to $500,000
3% on the amount exceeding $500,001
* Applicable thresholds for 2026
1.5% on the bracket from $315,000 to $552,300
2% on the bracket from $552,300 to $1,104,700
2.5% on the bracket from $1,104,700 to $2,136,500
3.5% on the bracket from $2,136,500 to $3,113,000
4% on the amount exceeding $3,113,000
* Applicable thresholds for 2026
Sample calculation of the welcome tax in Montreal (2026)
For a tax base of $700,000:
$62,900 × 0.5% = $314.50
$252,100 × 1% = $2,521.00
$237,300 × 1.5% = $3,559.50
$147,700 × 2% = $2,954.00
Total of all brackets: $314.50 + $2,521.00 + $3,559.50 + $2,954.00 = $9,349.00 payable.
When is the welcome tax due?
In general, the welcome tax is billed by the municipality shortly after the notarial deed is signed. In most cases, buyers receive their tax bill between three and six months after the purchase, although this timeframe can vary depending on the municipality’s internal processes.
Once the notice has been sent, the amount is typically payable as a lump sum within 30 days (or no later than the 31st day), in accordance with the Quebec government’s guidelines. Keep in mind that payment terms and conditions may vary from one municipality to another.
3 payment methods
New homeowners may have different options for paying the welcome tax depending on the municipality. Before making a payment, it’s important to verify the reference number, due date and any payment details. Interest may be charged if the payment is made after the due date.
The three most common payment methods are:
1. Online or at the counter of a participating financial institution
2. In person (debit card, credit card, cheque, money order or cash)
3. By mail (cheque or money order)
Plan to make your payment a few days before your bill is due to ensure it arrives on time.
Can you get an exemption or a refund?
In general, the welcome tax is charged on any transfer of ownership. However, the law sets out certain exemptions that may apply in the following situations:
The tax base is less than $5,000.
The transfer occurs between family members in a direct line of ascent (parents or grandparents) or descent (children or grandchildren).
The transfer is made between spouses (married, civil union or de facto spouses). De facto spouses generally must have been living together for at least 12 months, unless they are the parents of the same child.
Note that transfers between siblings aren’t exempt from the welcome tax. Likewise, transfers involving extended family members, such as aunts or uncles, don’t qualify for an exemption.
Special duties
When a property changes ownership, the municipality must update its property assessment roll. Even if the transaction is exempt from the welcome tax—for example, in the case of a transfer between parents or spouses—the municipality may still charge special duties of up to $200.
Refund programs to assist new homeowners
Some municipalities have programs that refund some or all of the welcome tax, provided specific eligibility criteria are met. For example, the City of Montreal has introduced a Home Purchase Assistance Program designed to help young families buy their first home.
New refundable tax credit for access to homeownership
To make it easier to buy a home, the Quebec government has introduced a new refundable tax credit. This measure is intended for first-time home buyers, as well as individuals who purchase a home with accommodations for a severe disability.
Eligible buyers could receive a refund of up to $5,875 on the welcome tax paid to their municipality. The credit covers the first $5,000 in full, plus 25% of the next $3,500, where applicable. To qualify, the property must have been purchased on or after January 1, 2026, and the buyer must be a resident of Quebec. Full details and eligibility criteria are available from Revenu Québec.
Is the welcome tax compulsory?
Regardless of what it’s called, the “welcome tax” is compulsory for most homebuyers. That’s why it’s a good idea to check with your municipality for an estimate before signing the deed of sale. Knowing the amount up front makes it easier to budget.
Want to learn more about DuProprio’s support? Watch our video to learn about our services and how to successfully sell without an agent.
