A Guide to Real Estate Taxes in Montreal
Montreal was voted the world's 6th best city in 2019, and this has captured the attention of many individuals and families who would like to establish themselves and enjoy a high-quality life in North America.
If you’re thinking of purchasing a home or already have one in Montreal, then you should consider the real estate taxes you have to pay and the local tax rates in Montreal, QC.
This article will give you a quick summary of real estate taxes and rates in Montreal, so you have some basic knowledge before consulting your realtor or mortgage broker.
Many new residents to Montreal are unsure whether real estate taxes and property taxes are the same things. In Montreal, there are two types of tax on real estate:
Transaction Taxes
Property Taxes
Transaction Taxes
When you buy a home, you will pay a property transfer tax and, if the home is new construction or a pre-sale purchase, you will also pay provincial sales tax.
Land transfer tax
Land transfer tax is common in most countries, and Canada is no different. In Canada, the land transfer tax is levied by each province.
When you purchase a house, condo or any property in Quebec, you are subject to land transfer tax, which is due on the purchase completion date.
It is a percentage of your home's purchase price, but the rates are tiered like steps on a ladder. In other words, higher-valued homes trigger higher taxes. There are six steps on the Montreal property transfer tax ladder.
Provincial Sales Tax
There is a 9.975% Québec Sales Tax (QST) on the price of new homes (but not on previously owned units) purchased from the builder or developer. Some buyers may be eligible for a partial refund of the QST, depending on the property's purchase price.
Property Taxes
Property taxes, which are essentially property ownership taxes, are charged every year, and they are collected to pay for services provided by the local government.
Property ownership taxes are calculated based on the assessed value of the property and land. In Quebec, two taxes fall under property tax.
School tax: The provincial government sets the school tax rate, and it is the same tax rate throughout Quebec. In Montreal, most school taxes are around 1%, but it could be as high as 3%.
Municipal tax: Municipal tax rate depends on the municipality and borough where you live.
You will need to factor these taxes and any condo fees (co-ownership fees) fees into your home buying budget.
School taxes
In 2018-2019 the Montreal school taxes were $0.17832 per $100 of municipal assessment, but the Government decreased the tax percentage.
In 2019-2020, the school tax rate went down to $0.15035 per $100
Municipal taxes
If you live in a residential area, then your municipal tax rate will be around 1.5% to 2.5%. The municipal tax is charged annually.
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Alp Perez is a Montreal real estate agent with Royal LePage and RealtorMontreal.ca. Within the last 5 years, he has helped hundreds of clients find their dream home in Montreal, QC, Canada. Apart from being a realtor, Alp is the owner of A Plus Digital, a Montreal-based search engine marketing & web design firm.
