Land Transfer Tax in Québec
In Canada, one of the largest closing costs any homebuyer will face is land transfer tax (LTT). Every province charges a LTT to buyers, except Alberta and Saskatchewan who instead levy a much smaller fee. The LTT varies slightly in each province, so the amount you pay will differ based on where you purchase a home and what the purchase price is. In this blog series, we want to explain how LTT works in your province or city. In today’s post, we’ll be looking at land transfer tax in Québec.
Québec Land Transfer Tax
In Québec, the LTT calculation is based on three different home price ranges and marginal tax rates. To calculate the Québec LTT, you simply run the purchase price through the marginal tax rates for each range. Using the chart below, you can begin to see how the Québec land transfer tax is calculated.
In Québec:
- The first $50,000 of your purchase price is subject to a 0.5% tax rate ($50,000 x 0.5%).
- The amount you paid between $50,000 and $250,000 is subject to a 1.0% tax rate [($250,000 – $50,000) x 1%].
- And anything you paid above $250,000 is subject to a 1.5% tax rate [(Purchase Price – $250,000) x 1.5%].
Note: In Montréal there is an additional tax bracket from $250,000 – $500,000 with a tax rate of 1.5%. Any amount you paid over $500,000 in Montréal has a tax rate of 2.0%.
Example Québec Land Transfer Tax Calculation
According to the Canadian Real Estate Association (CREA), the average Québec home price is $277,225. Using a home priced close to this average, we’ll calculate the Québec land transfer tax with our Québec land transfer tax calculator.
The 4-bedroom home seen above is located in Charlesbourg, Québec and is priced at $275,000. Enter the price into the land transfer tax calculator and you’ll see that the total Québec land transfer tax for this home is $2,625.
To reach that number, our calculator ran the asking price of $275,000 through the price ranges and marginal tax rates listed above:
- The first $50,000 would cost the buyer $250 ($50,000 x 0.5%)
- The next $200,000 ($250,000 – $50,000) is another $2,000 ($200,000 x 1%)
- And the remaining $25,000 ($275,000 – $250,000) is another $375 ($25,000 x 1.5%)
So the total Québec land transfer tax for this home would be: $250 + $2,000 + $375 = $2,625.
Québec Land Transfer Tax Rebate
Unfortunately, there are no land transfer tax rebates for first-time homebuyers in Québec, so you would have to pay the full land transfer tax amount of $2,625 in this example.
When you are considering buying a home, it’s important that you know all of the potential closing costs before making an offer, so you can budget your finances accordingly. As you can see with this example, your land transfer tax can add up fast, so it’s important to plan ahead and save for any additional costs you may need to pay for.