The City of Montréal announced yesterday that, effective January 29, 2010, it has increased the marginal rate for the calculation of duties on transfers of immovables to 2% in respect of the part of the consideration for the transfer which exceeds $500,000.
In Québec, duties are imposed on the transfer of the right of ownership in an immovable property such as a sale, a contract of lease for a term exceeding 40 years or the establishment of emphyteusis.
Every municipality in the Province of Québec must collect transfer duties on the transfer of any immovable situated within its territory. The transferee of the immovable is liable for the payment of such transfer duties to the municipality which are payable from the date of the registration of the transfer.
The basis of imposition for transfer duties is computed based on the greater of the following amounts:
- the amount of the consideration paid for the transfer of the immovable;
- the amount of the consideration stipulated in the deed of sale for the transfer of the immovable; and
- the amount of the market value of the immovable at the time of its transfer.
The duties on transfers of immovables situated within the City of Montréal's territory only are, as of January 29, 2010, calculated as follows:
| Basis of Imposition |
Rate |
| Part not exceeding $50,000 |
0.5% |
| Part exceeding $50,000 but not exceeding $250,000 |
1.0% |
| Part exceeding $250,000 but not exceeding $500,000 |
1.5% |
| Part exceeding $500,000* |
2.0% |
*Previously, the marginal rate for the part exceeding $500,000 was 1.5%.
The "welcome tax" resulting from the transfer of an immovable situated in the City of Montréal, with a basis of imposition of $1,000,000, would now be:
| $ 50,000 x 0.5% |
$ 250 |
| $200,000 x 1.0% |
+ $ 2,000 |
| $250,000 x 1.5% |
+ $ 3,750 |
| $500,000 x 2.0% |
+ $10,000 |
| |
$16,000 |
The Act respecting duties on transfers of immovables provides for certain exemptions from the payment of transfer duties.
Authored by Elias Benhamou.
If you have any questions regarding the foregoing, please contact Elias Benhamou (514.841.6427) or Brian Salpeter (514.841.6496) in our Montréal office.
Davies Ward Phillips & Vineberg LLP, with over 240 lawyers, practises nationally and internationally from offices in Toronto, Montréal and New York and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and international clients.
The information and comments herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstance. For particular applications of the law to specific situations, the reader should seek professional advice.
