An Act Respecting Duties on Transfers of Immovables (CQLR, c. D-15.1) requires municipalities to charge a tax on the transfer of ownership of any building located within its territory. Ownership must be assumed by the buyer. It is payable in a single payment, 30 days after the bill is issued.
It is important to know that the municipality will not reissue the property tax bill to the new owner of the building. Thus, the latter is responsible for ensuring that the municipal taxes are paid.
The transfer tax is based on the higher of the following amounts:
The comparative factors for the municipality are as follows: 1.06 for the 2015 fiscal year
The fee is calculated based on the following parameters:
|Tax base portion||Rate|
|$50,000 and under||0.5%|
|$50,001 and $250,000||1.0%|
|$250,001 and over||1.5%|
A buyer may be exempt from the payment of transfer duties under circumstances spelled out under An Act Respecting Duties on Transfers of Immovables. The notary has to enter a note in the deed of sale (or deed of conveyance) to ensure that the buyer benefits from the exemption from the transfer tax in cases provided under the Act. However, the municipality is entitled to request supporting documents for the application for exemption, and to deny it if those documents are deemed unsatisfactory.
The main situations justifying an exemption are as follows:
the transfer is to an ascendant or descendant in a direct line (e.g. father to son, grandmother to granddaughter);
the transferor is a natural person, and the transferee is a legal person of which at least 90% of the issued shares of the capital stock to which are attached full voting rights are owned by the transferor;
the transfer is between spouses, whether they are married or common law (as defined under An Act Respecting Duties on Transfers of Immovables). Same sex spouses are included in this provision of the Act.
Special duties are a form of compensation in lieu of transfer duties that are billed to buyers of an immovable property who are exempted from paying a transfer duty.
The Act sets out the special duty based on the following criteria:
|Basis for imposition||Amount payable|
|Immovable property less than $5,000||
|Immovable property is $5,000 or more and less than $40,000||
|Immovable property is $40,000 or more||