Family Property Transfers in Quebec: Welcome Tax Exemption and the Municipal Substitute Duty

A house that passes from a parent to a child, or from one spouse to the other, is not always subject to Quebec's transfer duties, commonly called the welcome tax. The law provides an exemption for certain transfers between relatives, with precise conditions, a statement to make at registration and, depending on the municipality, a substitute duty to pay instead. This article follows the text of the law, section by section. The regular welcome tax calculation is covered in our article on the Quebec welcome tax, and selling to a relative, from the price and financing angle, in our article on selling a house to a family member.

The reference text: section 20 of Act D-15.1

The exemptions between relatives are set out in section 20 of the Act respecting duties on transfers of immovables (chapter D-15.1), read here in its French version up to date as of August 12, 2026 on LégisQuébec; the quotations below are our translations. Paragraph d of its first paragraph covers the transfer of an immovable "in the direct line, ascending or descending, between spouses", as well as to certain members of the spouse's family.

In practice, that paragraph covers three families of transfers:

• between ascendants and descendants in the direct line, for example from a parent to a child or from a child to a parent;
• between spouses;
• to a transferee who is the spouse of the transferor's son, daughter, father or mother, or the son, daughter, father or mother of the transferor's spouse.

For a transfer to a grandchild or from a grandparent, have the notary confirm that the transfer falls within the direct line covered by that paragraph.

Who counts as a "spouse" under the Act

Section 20 defines spouses for the purposes of paragraph d. Besides married spouses and civil union spouses, it covers two people who, on the date of the transfer, live together in a conjugal relationship and have done so throughout a 12-month period ending before that date, or who are the parents of the same child.

The Act also deals with a recent separation: two people who lived together in a conjugal relationship are deemed to still do so on the date of the transfer, unless they are living apart on that date because of the breakdown of their union and that separation has lasted at least 90 days.

The two-year rule for a transfer to a descendant

The direct-line exemption has a limit, set out in the same section. It does not apply to a transfer to a descendant when the transferor had acquired the property from a descendant in the direct line, or from a trust that acquired it from such a descendant, and did not keep it for at least two years after that acquisition.

Two exceptions set that limit aside: a transfer resulting from the transferor's death, and a property transferred back to the person or trust it was acquired from. The rule therefore targets a property transferred to a descendant less than two years after being acquired from a descendant.

After a breakup: former de facto spouses

Paragraph d.1 of the same paragraph exempts a transfer between former de facto spouses, and to certain members of their families, provided it happens within one of the periods it sets: within 12 months after they started living apart, or within 30 days after the summary of agreements signed by an accredited mediator, the homologation of the agreement reached through family mediation, or the final judgment on the transfer.

The Act defines former de facto spouses as two people who lived together in a conjugal relationship for 12 months before the transfer, or who are the parents of the same child, and who on the date of the transfer have been living apart for at least 90 days because of the breakdown of their union.

The substitute duty a municipality may charge

An exemption deprives the municipality of the transfer duty. Section 20.1 allows it to provide that a substitute duty (in French, droit supplétif) be paid to it instead, in every case where an exemption applies to a property on its territory. Under section 20.7, that duty applies when a resolution adopted under section 20.1 is in force at the time the transfer is registered. You therefore have to check, municipality by municipality, whether such a resolution exists.

• Amount: under section 20.4, the substitute duty is $200. When the tax base of the transfer duty that would otherwise have been payable is under $40,000, it is equal to that transfer duty.
• Exceptions set by the Act: under section 20.1, it does not have to be paid when the exemption rests on paragraph a.2 of section 17 or on paragraph a of the first paragraph of section 20.
• Exceptions the municipality may choose: the same section allows it to waive the substitute duty, among other cases, for a transfer exempted under paragraph d of section 20 when it results from the transferor's death.
• Partial transfer: under section 20.5, when the transfer is made partly to an exempt transferee and partly to one who is not, only the first pays the substitute duty, based on the portion of the tax base that corresponds to them.

The statement to make, and what it commits you to

The exemption does not apply by itself. Under section 9, the application to register the transfer must state, where applicable, the provision of sections 17 to 20 under which, according to the transferee, the transferee is exempt. Under section 9.2, the land registrar must refuse to register a transfer if the application does not contain the information required by the first paragraph of section 9.

That statement commits the transferee. Section 23 provides that a person who makes false or misleading statements, or who evades or attempts to evade payment of the transfer duty, commits an offence punishable by a fine of up to $2,000 plus a penalty of 25% of the duty evaded. The notary prepares the application; it is up to the parties to give accurate information about their relationship and the property's history.