The real estate transfer tax has a catchy name in Quebec. It’s better known as the “Welcome Tax,” named for Jean Bienvenue who introduced it in 1976.
However, the Quebec Federation of Real Estate Boards (QFREB) says it’s not much of a welcome as residential property prices have tripled since 1992 but the brackets have not.
In 1992, someone who bought a property for $100,000 would have paid $750 in transfer taxes. Today, that same property is worth about $290,000, which translates into $2,850 in transfer taxes. The “Welcome Tax” has increased by 3.8 per cent, while property prices have risen by 2.9 per cent.
Under the QFREB proposed plan, transfer tax brackets would double so that home buyers would pay the following rates: 0.5 per cent on the first $100,000, 1.0 per cent on a value between $100,000 and $500,000 and 1.5 per cent on a value greater than $500,000. QFREB proposes regular indexing of the brackets to avoid drastic changes in the future.
QFREB also wants to exempt first-time home buyers from paying transfer taxes in addition to the existing exemptions. All municipalities must collect property transfer taxes, although some cities, such as Laval and Montreal, have implemented Welcome Tax refund programs to help young families in particular.
