First-Time Buyer Myth Busters: What the Welcome Tax Really Costs

When you buy a home in Montreal, the city sends you a special bill. Most people call it the Welcome Tax, though its official name is “Land Transfer Duties.”

There are many myths about this tax. Let’s clear them up so you can shop for your dream home with confidence!

Myth 1: First-time buyers don’t pay it.

Truth: In Quebec, almost everyone pays. Whether it is your first house or your fifth, the city will charge you this tax. There are only a few exceptions, like if a parent gives a house to their child. Otherwise, you should expect to pay.

Myth 2: It is a small, flat fee.

Truth: The tax is “progressive.” This means the more expensive the house is, the higher the tax rate becomes. For 2026, the rates in Montreal have small “brackets,” much like how we pay income tax.

How the Math Works (2026 Rates)

The city looks at your purchase price (or the municipal value) and charges you different percentages for different parts of that price:

• 0.5% on the first $62,900
• 1.0% on the amount between $62,900 and $315,000
• 1.5% on the amount between $315,000 and $552,300
• 2.0% on the amount between $552,300 and $1,104,700 (Note: Rates keep going up for luxury homes over $1 million!)

Example: If you buy a condo for $450,000, your tax would be about $4,860.

Myth 3: You pay it at the Notary’s office.

Truth: You don’t pay this when you sign the papers. The city will mail you a bill about 1 to 4 months after you move in. Once that bill arrives, you usually have only 30 days to pay the full amount.

My Tip for You

Since you have to pay this shortly after moving, don’t spend all your savings on your down payment or new furniture. Keep a “Welcome Tax Fund” set aside so you can pay the bill comfortably when it arrives in your mailbox.