Property transfer tax (welcome tax)
The right of real estate transfer , also frequently called “ t welcome axis ”, Owes this name not to an intention to“ welcome ”newcomers, but rather comes from the fact that it is Jean Bienvenue, then provincial minister of municipal affairs, who allowed the establishment of this field of taxation. .
The collection of property transfer duties by municipalities has been compulsory since 1992 (between 1976 and 1992, it was optional) and is governed by two provincial laws: the Act respecting duties on property transfers (RSQ, c. D 15.1) ( the “Act”) and the Act respecting municipal taxation (RSQ, c. F-2.1). Under these laws, every municipality must collect a duty on the transfer of any immovable located in its territory. This right must be assumed by the purchaser of the building. It is payable in a single payment, 30 days after issuance of the invoice.
Calculation of transfer tax
The Law provides that the tax base for the transfer tax is calculated from the highest of the following amounts:
- the amount of consideration provided for the transfer of the building (the price paid);
- the amount of consideration stipulated for the transfer of the property (the price entered in the deed of transfer);
- the amount of the market value of the immovable at the time of its transfer (standardized value entered on the municipal assessment roll).
The supplementary duty is a compensation invoiced to the purchasers of a building who are exempt from the payment of a transfer duty. The Law on duties on real estate transfers fixes the amount of the supplementary duty according to various criteria.
Exemptions and exclusions
Certain transfers of real estate are specifically exempted or excluded from the scope of application of rights on real estate transfers, this is the case in particular:
- purchases of buildings forming part of a registered agricultural operation;
- purchases made by public bodies;
- any transfer where the purchase price is less than $ 5,000;
- any transfer of property between parents in a direct ascending or descending line (other than brothers and sisters), either son, daughter, father, mother, between spouses, between father-in-law, mother-in-law, son-in-law, son-in-law and daughter-in-law);
- any transfer of property to his company, by a shareholder holding more than 90% of the shares of this company or vice versa.
For more information, please contact the taxation service at 581-353-2006 or by email at email@example.com, depending on the opening hours of this service.