Every buyer in Quebec pays land transfer duties — droits de mutation immobilière, universally nicknamed the welcome tax (taxe de bienvenue). It is the closing cost most often underestimated, for two reasons: it cannot be rolled into the mortgage, and Montreal's brackets climb meaningfully faster than the provincial base once the price passes $552,300.
If you are budgeting a purchase in 2026, this number belongs in your plan from day one — alongside the down payment, inspection, and notary fees. Here is exactly how it works.
The Official 2026 Montreal Brackets
The duty is calculated in tiers, like income tax: each slice of the price is taxed at its own rate. For deeds registered from January 1, 2026, the City of Montreal applies:
| Portion of the basis of imposition | Rate | |---|---| | Up to $62,900 | 0.5% | | $62,900 to $315,000 | 1.0% | | $315,000 to $552,300 | 1.5% | | $552,300 to $1,104,700 | 2.0% | | $1,104,700 to $2,136,500 | 2.5% | | $2,136,500 to $3,113,000 | 3.5% | | Above $3,113,000 | 4.0% |
Two things to note. First, the brackets are indexed annually — these figures are 2026-specific and will shift next year. Second, everything above the third bracket is Montreal exercising its special taxing powers: most Quebec municipalities stop at 1.5%, which is why the same $900,000 purchase costs meaningfully more in transfer duties in Montreal than in most off-island suburbs.
The basis of imposition is the highest of three numbers: the purchase price, the consideration stipulated in the deed, or the municipal assessment multiplied by the comparative factor for the year. In a market where sale prices routinely exceed municipal rolls, the purchase price usually wins — but on a below-market transfer (a family sale, for instance), the adjusted municipal value can produce a higher bill than the price paid.
Three Worked Examples
A $475,000 condo — roughly the median Montreal condo in 2026:
- 0.5% × $62,900 = $314.50
- 1.0% × ($315,000 − $62,900) = $2,521.00
- 1.5% × ($475,000 − $315,000) = $2,400.00
- Total: $5,235.50
A $700,000 plex or family home:
- First two brackets, as above = $2,835.50
- 1.5% × ($552,300 − $315,000) = $3,559.50
- 2.0% × ($700,000 − $552,300) = $2,954.00
- Total: $9,349.00
A $1,300,000 property:
- Brackets one through four = $17,395.50
- 2.5% × ($1,300,000 − $1,104,700) = $4,882.50
- Total: $22,278.00
The pattern to internalize: the duty is roughly 1.1% of the price at $475,000, 1.3% at $700,000, and 1.7% at $1.3M. The more you spend, the larger the percentage, not just the amount — a progressivity many buyers discover only at the notary's office.
When and How You Pay
You do not pay at closing. The city issues an invoice after the deed of sale is registered — typically three to six months later — and payment is due in a single installment 30 days after the bill is mailed. This delay is a trap for buyers who emptied their reserves on the down payment: the $9,000 bill arrives precisely when the moving, renovation, and furniture costs have already landed.
Practical rule: set the estimated duty aside in a separate account on the day you sign, and treat it as spent.
Exemptions and Special Cases
The main exemptions under the Act respecting duties on transfers of immovables:
Direct-line family transfers. Transfers between spouses (married, civil-union, and qualifying de facto partners), and in the direct ascending or descending line — parent to child, grandparent to grandchild — are generally exempt. Transfers between siblings are not exempt.
Low-value transfers. Where the basis of imposition is under $5,000, no duty applies.
Corporate reorganizations. Certain transfers involving a company and its shareholders (90%+ ownership) qualify — structuring advice belongs with your notary and accountant, particularly for investment property acquisitions.
Note that even when a transfer is exempt, Montreal charges supplementary duties (a modest flat amount) in most exemption scenarios.
First-time buyers: Quebec has no general welcome-tax exemption for first-time buyers, but Montreal runs a Home Purchase Assistance Program that can provide financial support — including, in eligible scenarios, an amount corresponding to a refund of transfer duties — for qualifying buyers of new or existing properties, subject to price ceilings and family-composition conditions. The program's parameters change; verify current eligibility on the city's site before counting on it. Federal tools like the FHSA and the Home Buyers' Plan help on the down-payment side; they do not touch the welcome tax.
How This Fits Your Total Closing Budget
For a $700,000 purchase in Montreal in 2026, a realistic closing envelope beyond the down payment looks like: transfer duty ~$9,350, notary $1,800–$2,800, inspection $600–$1,000, appraisal (if not lender-covered) ~$500, title insurance ~$300–$500, plus adjustments for prepaid municipal/school taxes. Call it $13,000–$15,000 of cash that is neither down payment nor mortgage-financeable.
Buyers comparing Montreal to off-island markets should run this number both ways: on the same $700,000 purchase, a municipality using only the provincial brackets bills about $6,400 — a $2,900 difference that is real but rarely decisive against the commute, lifestyle, and appreciation trade-offs of the neighborhood itself.
FAQ
Can the welcome tax be added to my mortgage? No. It is a municipal invoice issued to you after registration, not a closing disbursement your lender finances. It must be paid from cash reserves, in one installment, 30 days after billing.
Why is my bill higher than the calculator estimate I ran on the purchase price? Most likely the basis of imposition was not your price: if the municipal assessment times the annual comparative factor exceeds what you paid, the duty is computed on that higher figure. This is common on transfers below market value.
Do I pay welcome tax on a new construction condo? Yes — on the price of the unit (the taxable basis generally excludes the GST/QST portion in most standard scenarios; your notary will confirm the exact basis in the deed). Budget for it in pre-construction purchases the same as resale.
Is the welcome tax deductible? Not for a principal residence. For a rental property, transfer duties are added to the building's cost base (capital cost) rather than deducted as a current expense — a point worth coordinating with your accountant.
Related Resources
- First-Time Home Buyer in Montreal: The 2026 Guide
- Best Montreal Neighborhoods to Buy a Condo in 2026
- Real Estate Broker Commission in Quebec 2026
- Montreal Mortgage Rates and Financing Environment
- Buyer Representation Services
Planning a purchase and want the full cost picture before you offer? Let's talk.
Jeremy Soares — OACIQ H2731