Subject to adoption of the proposed bylaw (which is expected to
occur on or before December 31, 2011), the city of Montréal
will, effective January 1, 2012, increase to 2.5% the marginal rate
used to calculate the duties imposed on the transfer of immovables
in respect of that portion of the basis of imposition which exceeds
$1,000,000.
In the province of Québec, duties are imposed on the
transfer of 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 Québec must collect transfer duties on
the transfer of any immovable situated within its territory. The
transferee of the immovable is liable to the municipality for the
payment of such duties as of the date of the transfer
registration.
The basis of imposition for transfer duties is determined based on
the greater of the following amounts:
- the consideration furnished for the transfer of the immovable;
- the consideration stipulated in the deed of transfer of the immovable; and
- the market value of the immovable at the time of transfer.
Subject to adoption of the proposed bylaw, the duties imposed on the transfer of immovables situated within the city of Montréal's territory only, will be, as of January 1, 2012, calculated as follows:
|
Basis of Imposition |
Rate |
|
Portion not exceeding $50,000 |
0.5% |
|
Portion exceeding $50,000 but not exceeding $250,000 |
1.0% |
|
Portion exceeding $250,000 but not exceeding $500,000 |
1.5% |
|
Portion exceeding $500,000 but not exceeding $1,000,000 |
2.0% |
|
Portion exceeding $1,000,000* |
2.5% |
* Currently, the marginal rate for the portion exceeding
$1,000,000 is 2% within the territory of the city of
Montréal. In the other cities of the province of
Québec, the marginal rate applicable to the basis of
imposition which exceeds $250,000 is 1.5%, with no increased rate
being applied on the portions exceeding $500,000 or
$1,000,000.
For example, the "welcome tax" resulting from the
transfer of an immovable situated in the city of Montréal
with a basis of imposition of $2,000,000 would now be as
follows:
|
$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 |
|
$1,000,000 x 2.5% |
+ $25,000 |
|
|
$41,000 |
We recommend reviewing your transactions scheduled to occur in
the coming weeks in light of this new marginal rate.
The Act respecting duties on transfers of immovables
provides for certain exemptions from the payment of transfer
duties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
