Montreal Welcome Tax 2026: Detailed Calculation by Bracket

Published April 20, 2026 · Updated October 12, 2026 · Hamza Taleb, courtier immobilier OACIQ | RE/MAX

The welcome tax — officially known as “transfer duties” or droits de mutation immobilière — is one of the most significant closing costs every Quebec property buyer must plan for. In Montreal, these duties can represent a substantial cash outlay: the City applies seven brackets, with rates of 2% to 4% above $552,300. For a broader look at the provincial framework, see our complete guide to Quebec transfer duties in 2026. This article focuses specifically on Montreal: updated brackets, worked dollar-for-dollar examples, and available exemptions.

What Is the Welcome Tax?

Transfer duties were introduced in Quebec in 1976 by Minister Jean Bienvenue — hence the colloquial name “welcome tax.” They are levied by the municipality on every real estate transfer. The amount is calculated on the highest of the purchase price (excluding GST and QST), the consideration stated in the deed, and the municipal assessment roll value multiplied by the comparative factor.

Unlike many other closing costs, the welcome tax cannot be negotiated and cannot be rolled into your mortgage. The City sends the bill after the deed of sale is published; it is payable in a single instalment within 30 days of being sent.

Official Montreal Transfer Duty Brackets for 2026

Montreal applies the same first three brackets as the rest of Quebec, then its own rates for higher-value properties. Here is the complete schedule in force since January 1, 2026, according to the City of Montreal:

Important: the tax is progressive, meaning each rate applies only to the portion of the price falling within that bracket — exactly like income tax. A $420,000 purchase is not taxed at 1.5% on the full amount.

Example 1: Condo at $420,000

A buyer purchasing a $420,000 condo in Montreal in 2026 would owe the following:

• Bracket 1 ($0 to $62,900): $62,900 x 0.5% = $314.50
• Bracket 2 ($62,900 to $315,000): $252,100 x 1.0% = $2,521.00
• Bracket 3 ($315,000 to $420,000): $105,000 x 1.5% = $1,575.00

Total: $4,410.50. This represents approximately 1.05% of the purchase price.

Example 2: Single-Family Home at $560,000

For a $560,000 single-family home in Montreal:

• Bracket 1: $62,900 x 0.5% = $314.50
• Bracket 2: $252,100 x 1.0% = $2,521.00
• Bracket 3: $237,300 x 1.5% = $3,559.50
• Bracket 4 ($552,300 to $560,000): $7,700 x 2.0% = $154.00

Total: $6,549.00, or roughly 1.17% of the purchase price. Notice how the effective rate increases with the price due to the progressive structure.

Example 3: Plex at $855,000

For an $855,000 plex in Montreal, here is the transfer duty calculation:

• Bracket 1: $62,900 x 0.5% = $314.50
• Bracket 2: $252,100 x 1.0% = $2,521.00
• Bracket 3: $237,300 x 1.5% = $3,559.50
• Bracket 4 ($552,300 to $855,000): $302,700 x 2.0% = $6,054.00

Total: $12,449.00. This significant amount must be factored into your investment analysis: this non-recoverable expense adds to closing costs and affects the annualized return calculation.

Montreal’s Brackets Above $1M

There is no separate surcharge in Montreal: progressivity comes from the brackets themselves. The rate reaches 2.5% between $1,104,700 and $2,136,500, 3.5% up to $3,113,000, then 4% above that.

For example, on a $3,000,000 property, the duties total $73,460.50: $6,395.00 on the first three brackets, $11,048.00 at 2%, $25,795.00 at 2.5% and $30,222.50 at 3.5% on the portion between $2,136,500 and $3,000,000. This reality primarily affects the luxury segment in boroughs such as Westmount, Outremont, and the Plateau-Mont-Royal (Carré Saint-Louis area).

Calculation Basis: Purchase Price or Municipal Assessment?

The welcome tax is calculated on the higher of two amounts: the actual sale price, and the municipal assessment roll value adjusted by the comparative factor. This factor, published annually, brings the assessment closer to actual market value. For 2026, the first year of the new roll, it is 1.00 in Montreal.

In practice, in a rising market like 2026, the purchase price generally exceeds the adjusted roll value, so the price paid serves as the tax base. However, in a correcting market or for a below-market purchase (estate sale, repossession, quick sale), the adjusted assessment could be higher than the price paid, resulting in a larger-than-expected welcome tax bill.

Available Exemptions: Who Can Avoid the Tax?

Quebec’s Act respecting duties on transfers of immovables provides for several full or partial exemptions:

• Transfers between spouses or direct-line relatives: transfers between married or common-law spouses, parent and child, or grandparent and grandchild are exempt.
• First-time buyers (Quebec tax credit): this is not an exemption. The duties remain payable to the City, but for a home acquired since January 1, 2026, a refundable tax credit reimburses 100% of the first $5,000 and 25% of the next $3,500, up to $5,875. The credit decreases above $750,000 and is nil at $1,000,000.
• Corporate reorganizations: certain restructurings between related companies may qualify for an exemption.
• Consideration under $5,000: transfers with minimal consideration are exempt.

To claim the credit, neither the buyer nor their spouse may have owned a home they lived in since the beginning of the fourth calendar year before the purchase, and the home must become their principal residence. Source: Finances Québec information bulletin 2026-2. For a $420,000 condo, the credit covers the full $4,410.50 in duties.

When and How to Pay the Welcome Tax

The process is fully automated. After the notary publishes the deed of sale at the Quebec Land Registry (Registre foncier), the municipality is notified of the transfer and issues the transfer duty bill.

Payment is due in a single instalment within 30 days of the bill being sent. No mortgage financing is available for this expense. It is therefore essential to set this amount aside in your closing cost budget. For a $560,000 purchase, you need approximately $6,550 in available liquidity on top of your down payment and other fees (notary, inspection, moving).

Late payments incur penalty interest. The municipality can also register a legal hypothec on the property to secure the outstanding amount.

Strategies to Plan for the Welcome Tax

Here are practical tips to manage the welcome tax impact on your budget:

• Budget 1.0% to 1.5% of the purchase price for the welcome tax in your financial planning.
• Use a line of credit as a safety net if your liquidity is tight after the down payment.
• Check the comparative factor for the current year with the City to estimate your tax base precisely.
• First purchase? Set the money aside anyway: the refundable tax credit comes after the duties are paid.
• Do not confuse the welcome tax with annual municipal property taxes or GST/QST applicable to new-build properties.

Summary Table: Welcome Tax by Property Type

Frequently Asked Questions

How much is the welcome tax on a $420,000 condo in Montreal?

The welcome tax on a $420,000 condo in Montreal in 2026 is $4,410.50. This is calculated using progressive rates: 0.5% on the first $62,900, 1.0% from $62,900 to $315,000, and 1.5% from $315,000 to $420,000.

Are first-time buyers exempt from the welcome tax in Montreal?

No: the duties remain payable to the City. Since January 1, 2026, however, Quebec grants first-time buyers a refundable tax credit that reimburses up to $5,875: 100% of the first $5,000 and 25% of the next $3,500. It decreases above $750,000 and is nil at $1,000,000. The home must become the principal residence.

What rates apply to properties over $1M in Montreal?

There is no separate surcharge: the rate is 2.5% from $1,104,700 to $2,136,500, 3.5% up to $3,113,000, then 4% above. For a $3M property, the duties total $73,460.50.

When do you have to pay the welcome tax after buying?

The City sends the bill after the deed of sale is published. It is payable in a single instalment within 30 days of being sent. Interest applies to late payments.