What solutions exist to avoid the welcome tax?

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When a property changes hands in Quebec, the real estate transfer duty—also known as the welcome tax—is added to the bill. This mandatory cost can amount to several thousand dollars, depending on the value of the property and the municipality. In 2025, as many cities have adjusted their thresholds and new assistance programs appear, it is essential to understand who is required to pay, how the tax is calculated, and in what situations exemptions may apply.

What is the welcome tax?

The transfer duty is a municipal levy charged when registering a real estate transfer. Whether it involves a residential building, a plot of land, or a commercial space, this tax applies in almost every municipality in Quebec.

The buyer must pay it within 30 days of receiving the municipal invoice. Municipalities may also allow for installment payment arrangements of this duty.

How is the tax calculated in 2025?

The calculation is based on the higher of the following two amounts:

The price stated in the deed of sale,
The adjusted municipal assessment value.

Tax brackets in effect in 2025, outside major cities

According to the 2025 ministerial decree, the following rates apply:

Value Bracket	Rate
Up to $61,500	0.5%
From $61,500 to $307,800	1%
From $307,800 to $500,000	1.5%
Over $500,000 (in some cities)	3%

Each municipality may apply an optional higher bracket, according to its local regulations.

Specific rules in Montreal, Quebec City, and Laval in 2025

The tax brackets can differ depending on the municipality:

Montreal :

Progressive rate up to 4% for properties over $3.113M.
Brackets adjusted annually according to the price index.

Quebec city :

Rates up to 3% on very high-value properties.

Laval :

Rates up to 3% on very high-value properties.

Who can be exempt from the welcome tax?

Certain situations outlined in the Act respecting duties on transfers of immovables allow for a full exemption. These exemptions are not automatic and must be applied for with the appropriate supporting documents.

Main exemptions in 2025:

Transfers between parents and children, or grandparents and grandchildren.
Transfers between married or civil union spouses.
Transfers between common-law partners are permitted, provided they have lived together for at least 12 consecutive months.
Family partition following a divorce or legal separation.
Estate transfer: when a property is inherited by a direct heir (spouse, child).
Transfer to an eligible family trust, in particular, in legally regulated cases.

Situations that do not qualify for exemption:

Transfer between siblings.
Give a gift to a cousin or a friend.
Purchase by a corporation, except under particular circumstances.

Common Situations to Understand

Inheritance case:

If the transfer is made through a will or estate succession, the exemption applies to direct beneficiaries.

Gift between relatives:

Possible without tax, but only if the family relationship is recognized and documented (notary, proof of cohabitation, etc.).

Beware of Risky Legal Schemes

Some people try to avoid the tax through strategies such as incorporation or transferring to a trust, but these methods:

do not guarantee an exemption,
may be challenged by the municipality,
can result in penalties if deemed abusive.

It is always recommended to consult your mortgage broker or a tax specialist before taking any such steps.

Practical Tips to Reduce or Anticipate the Tax

With the support of a professional mortgage broker, you can receive personalized advice:

Take the transfer duty into account as early as the promise to purchase. Please include it in your down payment calculations.
Compare rates by city: the same property may generate very different taxes in Saint-Lambert, Longueuil, or Sherbrooke, for example.
Analyze your family situation: a transfer between spouses may allow for an exemption if the transaction is planned correctly.
Keep all supporting documents, such as proof of cohabitation, a divorce judgment, or a will, to facilitate any potential claim.

Conclusion

In 2025, the welcome tax remains an unavoidable step for most buyers, but it can be avoided in some instances or partially reimbursed through municipal programs. By informing yourself in advance and consulting your mortgage broker before a property purchase, you can better plan your investment and avoid unpleasant surprises.