Welcome tax: what changes in 2026 for first-time buyers

The welcome tax is one of the biggest financial shocks of a purchase for a first-time buyer in Quebec. On a $645,000 single-family home in Montreal, it reaches $8,249, billed by the City after the purchase. The real 2026 change for first-time buyers is not a municipal exemption: it is a Quebec refundable tax credit, in force for homes acquired since January 1, 2026. For the bracket details, see our Montreal welcome tax 2026 guide.

How the welcome tax works in 2026

Officially called transfer duties, the tax is calculated in progressive brackets on the highest of the price paid (excluding GST and QST), the consideration stated in the deed, and the municipal assessment multiplied by the comparative factor. In 2026, the indexed thresholds are $62,900 and $315,000: 0.5% up to $62,900, 1% from $62,900 to $315,000, then the statutory 1.5% above. Above $500,000, a municipality may apply a higher rate: in Montreal, 1.5% up to $552,300, then 2%, 2.5%, 3.5% and 4% in steps.

For a $500,000 property, the tax is $5,610.50, in Montreal as at the statutory rate. For $800,000 in Montreal, it reaches $11,349. It is paid to the municipality, not to the notary: the City sends the bill after the deed is published, payable in a single instalment within 30 days of being sent.

The 2026 change: a refundable tax credit

The refundable tax credit for access to home ownership reimburses 100% of the first $5,000 of transfer duties and 25% of the next $3,500, up to $5,875. It is reduced by 2.35% of the value above $750,000 and is nil at $1,000,000. Because it is refundable, it also benefits a buyer who pays little tax. Source: Finances Québec information bulletin 2026-2, April 17, 2026.

Three examples: at $500,000, the credit is $5,152.63 on $5,610.50 of duties, leaving about $458 for the buyer. At $645,000 in Montreal, the credit is $5,812.25 on $8,249 of duties. At $800,000 in Montreal, the reduction brings the credit down to $4,700 on $11,349 of duties.

Main conditions: 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, the home must become their principal residence, and the buyer must reside in Quebec at the end of the year of acquisition. The duties must first be paid to the municipality: the credit is a reimbursement, not an exemption.

Other help for first-time buyers

Federally, the home buyers’ amount provides a non-refundable tax credit of up to $1,500. The First Home Savings Account (FHSA) lets you build your down payment with a tax deduction: $8,000 per year, $40,000 lifetime, and tax-free withdrawals for a first home purchase.

First-time buyer strategy in 2026

Step 1: check your eligibility for the credit before making an offer, especially the period without an owner-occupied home, which includes your spouse.

Step 2: budget for the full duties. The credit comes after payment, so you need the money when the City’s bill arrives. Do not confuse it with notary fees or municipal tax adjustments.

Step 3: use the FHSA for the down payment, and keep your documents (deed of sale, bill and proof of payment of the duties) to claim the credit from Revenu Québec.

Conclusion: the credit mostly changes the math below $750,000

For a first purchase below $750,000, the credit covers all or most of the transfer duties, up to $5,875. Above that, it decreases and disappears at $1,000,000. Calculating the duties up front, checking eligibility and planning cash flow until the reimbursement remains the best strategy.