Montreal Welcome Tax 2026: Detailed Calculation by Bracket

Published April 20, 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, where the median condo price has reached $420,000 (+3%) and the median plex price stands at $855,000 (+9%) according to APCIQ March 2026 data, these duties can represent a substantial cash outlay. 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 higher of two values: the actual purchase price, or 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. It is payable in a single lump sum, typically within 30 days of receiving the bill from the city, which arrives roughly 60 to 90 days after the notarial signing.

Official Montreal Transfer Duty Brackets for 2026

Montreal applies the same base brackets as the rest of Quebec, plus an additional tier for high-value properties. Here is the complete 2026 schedule:

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 condo at the 2026 Montreal median of $420,000 would owe the following:

• Bracket 1 ($0 to $58,900): $58,900 x 0.5% = $294.50
• Bracket 2 ($58,900 to $294,600): $235,700 x 1.0% = $2,357.00
• Bracket 3 ($294,600 to $420,000): $125,400 x 1.5% = $1,881.00

Total: $4,532.50. This represents approximately 1.08% of the purchase price. With the Bank of Canada rate at 2.25% and 5-year fixed mortgage rates around 3.69%, every dollar matters in your acquisition budget.

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

For a single-family home at the Montreal metropolitan median of $560,000:

• Bracket 1: $58,900 x 0.5% = $294.50
• Bracket 2: $235,700 x 1.0% = $2,357.00
• Bracket 3: $205,400 x 1.5% = $3,081.00
• Bracket 4 ($500,000 to $560,000): $60,000 x 2.0% = $1,200.00

Total: $6,932.50, or roughly 1.24% of the purchase price. Notice how the effective rate increases with the price due to the progressive structure.

Example 3: Plex at $855,000

The Montreal plex market continues to strengthen, with a median price of $855,000 in March 2026 — a 9% year-over-year increase according to APCIQ. Here is the transfer duty calculation:

• Bracket 1: $58,900 x 0.5% = $294.50
• Bracket 2: $235,700 x 1.0% = $2,357.00
• Bracket 3: $205,400 x 1.5% = $3,081.00
• Bracket 4 ($500,000 to $855,000): $355,000 x 2.0% = $7,100.00

Total: $12,832.50. This significant amount must be factored into your investment analysis. For an investor financing at a variable rate of approximately 3.35% (prime at 4.45%), this non-recoverable expense adds to closing costs and affects the annualized return calculation.

Montreal’s Supplementary Tax for Properties Over $2M

Montreal distinguishes itself from other Quebec municipalities by imposing an additional 3% transfer duty on the portion of the price exceeding $2,000,000. This measure, authorized under municipal law, targets ultra-high-value properties.

For example, on a $3,000,000 property, the surcharge would be $1,000,000 x 3% = $30,000, on top of regular transfer duties of approximately $40,732.50, for a combined total of roughly $70,732.50. 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.

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 (municipal program): the City of Montreal occasionally offers welcome tax reimbursement programs for purchases of new properties in targeted areas. Conditions vary by borough and project.
• Corporate reorganizations: certain restructurings between related companies may qualify for an exemption.
• Consideration under $5,000: transfers with minimal consideration are exempt.

Note that there is no universal provincial first-time buyer exemption for transfer duties in Quebec. However, some municipalities, including Montreal, have created incentive programs from time to time. Check with your notary or real estate broker whether such a program is active at the time of your purchase.

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 a tax bill within 60 to 90 days.

Payment is due in a single instalment within 30 days of receiving the bill. 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 $7,000 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.
• Consult your real estate broker to verify whether any assistance programs or exemptions apply to your situation.
• 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 $4,532.50. This is calculated using progressive rates: 0.5% on the first $58,900, 1.0% from $58,900 to $294,600, and 1.5% from $294,600 to $420,000.

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

There is no automatic provincial exemption for first-time buyers in Quebec. However, the City of Montreal periodically offers reimbursement programs for purchases of new properties in certain targeted areas. The buyer must not have owned property in the past 5 years and must use the property as a primary residence. Check eligibility with the City at the time of your purchase.

What is the supplementary tax for properties over $2M in Montreal?

Montreal imposes a 3% surcharge on the portion of the price exceeding $2,000,000. This is added on top of regular transfer duties. For a $3M property, this means $30,000 in surcharges plus approximately $40,732.50 in base duties.

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

The municipality sends the welcome tax bill within 60 to 90 days after the notarial deed of sale. Payment is due in a single instalment within 30 days of receiving the bill. Penalty interest applies for late payments.