How to calculate the Welcome Tax in less than 20 secs.

Every municipality must collect duties on the transfer of any immovable situated within its territory. These land transfer duties are better known as the “Welcome Tax”. This tax is payable by the buyer and is calculated as follows:

• 0.5% of the first $50,000;
• 1% of the next $50,000 to $250,000;
• 1.5% of any portion exceeding $250,000.

For example:
If a property is sold for $180,000. The transfer duties payable to the municipality will be:

0.5% of the first $50,000 = $250

1% of the next $130,000 = $1,300

(1.5% of the portion exceeding $250,000 = n/a)

Total= $1,550

Another example for a property sold for $300,000

0.5% x $ 50,000 = $250
1% x $200,000 = $2,000
1.5% x $50,000 = $750

Total= $ 3,000

For more information on the land transfer duties payable on a given transaction, please contact the municipality concerned.

Subscribe to The Montreal Real Estate Blog to get more info on closing costs.