The droits de mutation — colloquially known as the "welcome tax" or taxe de bienvenue — is one of the largest closing costs Quebec property buyers face. Understanding how it works, how much you'll owe, and how Montreal's special surtax affects higher-value purchases is essential for anyone buying property in Montreal in 2025.
Droits de mutation are a provincial tax levied on all property transfers in Quebec, governed by the Loi concernant les droits sur les mutations immobilières. The tax is paid to the municipality at the time of purchase. In most of Quebec, there is only the provincial rate. In the city of Montreal specifically, an additional municipal surtax applies to high-value properties.
The term "welcome tax" (taxe de bienvenue) is a sardonic nickname coined because the tax feels like the municipality "welcoming" you by immediately taxing you. The name stuck and is used universally in Quebec real estate conversations.
| Portion of Purchase Price | Tax Rate |
|---|---|
| First $52,800 | 0.5% |
| $52,800.01 to $264,000 | 1.0% |
| $264,000.01 to $528,500 | 1.5% |
| Above $528,500 | 2.0% |
The city of Montreal levies an additional 3% surtax on the portion of the purchase price above the municipal threshold. For 2025, this threshold is approximately $500,000 (the exact amount is adjusted annually and should be confirmed with the city). This surtax applies only within the official boundaries of the city of Montreal — it does not apply in off-island suburbs like Laval, Longueuil, or municipalities like Dollard-des-Ormeaux, Côte-Saint-Luc, or Mont-Royal.
The buyer pays the droits de mutation. It is due within 30 days of receiving the assessment from the municipality, which typically arrives 2–4 weeks after the notarized deed of sale is registered. Your notary will explain the timing and help you anticipate the payment.
Several transfers are exempt from droits de mutation in Quebec:
The exemption rules are complex and have conditions. Always confirm with your notary whether an exemption applies to your specific situation.
Unlike some provinces, Quebec does not offer a general first-time homebuyer exemption from droits de mutation. There is no equivalent to Ontario's First-Time Home Buyer Land Transfer Tax Refund in Quebec. Some municipalities outside Montreal have offered temporary rebates in specific years, but the city of Montreal does not have a standing first-time buyer rebate program as of 2025.
The welcome tax is NOT typically paid at closing (unlike land transfer tax in other provinces). In Quebec, you pay it weeks after closing when the municipality sends you a bill. However, you must have the funds available. Many buyers are caught off guard by a $100–$30,000+ bill arriving a month after their already-expensive closing. Budget for it explicitly as part of your closing cost reserves.
Tip: Ask your notary for an estimate of the droits de mutation before closing. Know the number in advance and have the funds set aside. Some buyers budget it into their closing cost calculations and simply keep that amount in savings post-closing to pay the bill.
For buyers considering properties at $600,000+ who are flexible about location, the Montreal surtax can be a significant factor. Buying an equivalent property in Laval, Longueuil, or west island municipalities like Kirkland, Beaconsfield, or Dollard-des-Ormeaux avoids the Montreal surtax entirely. On a $900,000 property, this saves approximately $12,000 in welcome tax. Whether this savings outweighs the lifestyle and location considerations depends on your priorities.
When calculating total home purchase costs, include:
On a $700,000 Montreal purchase, total out-of-pocket costs beyond the down payment can easily reach $25,000–$35,000. Plan for this in your savings strategy well before you start house hunting.
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