The welcome tax... what is it exactly?
The “welcome tax”: a funny way to say… welcome!
If you thought becoming a homeowner meant choosing between quartz or laminate countertops, let me introduce you to another staple of Quebec décor: the famous welcome tax, aka the real estate transfer tax.
What is it exactly?
Officially, it is the real estate transfer rights. In plain terms: every time a property changes owners (sale, gift, exchange, sometimes even inheritance), the municipality sends you a bill. It’s not the broker’s commission nor the notary’s fees: it’s a separate tax, calculated on the property's value.
The calculation base? Take the higher of:
- the price paid;
- the price registered in the deed of sale;
- the value in the municipal assessment roll (adjusted with a famous “comparative factor”).
Then, apply a progressive rate, which increases in value brackets. Large cities like Montreal, Quebec City, Laval or Longueuil have their own schedules, often steeper for more expensive properties.
Why is it called the “welcome tax”?
No, it isn’t (officially) government dark humor. The nickname comes from Minister Jean Bienvenue, who was in office when the Law on Real Estate Transfer Rights was enacted in the late 1970s. The irony was too perfect: a new tax on buying a house, led by a minister named… Bienvenue. The people did the rest.
Can it be avoided?
Sometimes, but not often. Some transactions between close relatives, spouses, or within agricultural operations may be exempt, under conditions. Otherwise, the general rule: you receive the bill from your municipality and you have 30 days to pay, under penalty of interest.
So yes, the welcome tax stings a bit. But at least now you’ll know who to thank… and why this “arrival gift” carries its name so fittingly (or so ill-fitting).