Buying a home? Here's everything you need to know about Quebec's 'welcome' tax

Quebec's welcome tax explained Quebec's welcome tax: What is it, why is it so expensive and where does the money go?

Anyone who has bought a home in Quebec knows the rollercoaster high of making that big, life-changing purchase – and the sudden crash that occurs when the welcome tax bill comes in the mail, alongside its 30-day payment deadline.

The "welcome" tax, officially known as the property or real estate transfer tax, can range from a few thousand to tens of thousands of dollars, depending on how much the home was bought for.

"When any property title is changing hands, the province is taxing that transaction," explains Dr. Brian Wenzel, an associate professor in accounting at McGill University's Desautels Faculty of Management.

It's a municipal-level payment that was provincially established in 1976 – an efficient way for cities to make money without having to pass by higher channels.

"This welcome tax stays inside of Montreal," Wenzel notes. "So, it's a nice benefit for the City of Montreal because it's one of the few areas where they can actually raise revenue without having to ask Quebec City what they can do."

The nickname, "welcome" tax, or "la taxe de bienvenue," comes from then-Quebec Liberal (PLQ) Minister Jean Bienvenue, who was the one who tabled the bill recommending its introduction.

Back then, according to the Quebec Municipal Affairs Ministry, the goal was to allow municipalities to "increase their tax base and become self-financing."

"However, the bill in question was the work of the Minister of Municipal Affairs Guy Tardif, who sponsored it until its adoption on Dec. 22, 1976," the ministry points out.

'Major' source of revenue

In 2022, the Quebec Municipal Affairs Ministry says the province's cities amassed $1.4 billion from property transfer taxes, representing "a major source of revenue for the municipalities."

The City of Montreal alone received more than $410 million from welcome taxes that year.

In 2023, the city made $286 million and in 2024, officials expect yields of more than $324 million from property transfer taxes.

For 2025, Montreal is estimating gains of more than $314 million.

"It's a revenue raiser. It sounds bad, like the government wants more money, but it's a different base of raising revenue, and that's the point of it," Wenzel tells CTV News. "It's kind of diversifying the finance system of the government. So, while it sucks when you have to pay it, and I've had to do that, I understand the point of [it is] just to broaden the base of taxation."

When asked how the money raised is reinvested, City of Montreal officials would only say, "the money from transfer duties is used to finance all city services."

The Quebec Municipal Affairs Ministry clarifies that this could include the maintenance and construction of infrastructure, such as the water supply system, roads, parks and other municipal services.

"All the money just goes into the general funds pot at the City of Montreal that allows them to perhaps not tax property elsewhere as high," Wenzel said.

He notes that with interest rates dropping, experts believe the real estate market could soon boom -- resulting in more money for the cities.

"You could lower fees and other taxes elsewhere if you have this windfall of revenue coming in, in theory," he muses.

Calculating the tax

Wenzel explains that the welcome tax calculation is broken up into several brackets.

The first three brackets are fixed by provincial law, and municipalities are free to establish additional tax rates as long as they do not exceed three per cent.

Montreal and Quebec City have exceptions to this rule.

As of 2024, the rates are as follows:

Additionally, the City of Montreal charges:

That means that for a $700,000 home:

Therefore, the total welcome tax amount would be $9,471.

For a million-dollar property, that number goes up to just over $15,000 in cities like Montreal and Laval and more than $19,000 in Longueuil on the South Shore.

Both the Organisme d'autoréglementation du courtage immobilier du Québec (OACIQ) and the Quebec Professional Association of Real Estate Brokers (QPAREB) said they were unable to speak on the topic and its place in real estate in the province.

Anyone wanting to calculate how much their welcome tax could cost can use the calculator here.