You have signed the deed of sale, collected the keys, and started settling into your new home. Then, a few weeks later, a bill arrives from your municipality: the taxe de bienvenue, commonly known as the welcome tax.  For many first-time buyers in Quebec, the expense can come as a  surprise or a line item that was factored into the budget without fully understanding how it is calculated. Understanding how the tax works and what you can expect to pay before closing can help you plan accordingly.

What is the welcome tax?

The welcome tax is the informal name for the droits de mutation immobilière, the real property transfer duties, that apply to virtually every real estate purchase in Quebec. Despite the friendly nickname, the welcome tax is a mandatory expense that buyers should plan for, with the amount generally based on the value of the property purchased.

The tax is a municipal revenue tool. It is collected by your municipality, not by the provincial government, and the money stays at the municipal level to fund local services.

How the tax is calculated

The welcome tax is calculated progressively, on the same principle as income tax brackets. It applies to the highest of three values: the purchase price, the amount declared in the deed of sale, or the property’s market value as assessed by the municipality. In practice, this is usually the purchase price.

For 2026, the provincial rate brackets are:

The first $62,900 of the property’s value is taxed at 0.5%. The portion between $62,900.01 and $315,000 is taxed at 1.0%. Everything above $315,000 is taxed at 1.5%.

As an example: on a $450,000 property, you would pay $314.50 on the first bracket, $2,521 on the second bracket, and $2,025 on the amount above $315,000, for a total of approximately $4,861.

These are the provincial minimums. Municipalities can set their own rates for amounts above $500,000. The City of Montreal, for instance, applies additional rates on higher-value properties, with progressive brackets that go well above the provincial base rate. If you are buying in Montreal, calculate your welcome tax using the city’s own rates, which are available on the city’s website.

When do you pay the tax and to whom?

The bill does not arrive at closing. It is sent by your municipality after the deed of sale is registered with the land registry (Bureau de la publicité des droits). You typically have 30 days from the date of the invoice to pay. Payment is made directly to the municipality.

The timing means that buyers should budget for the welcome tax as a closing cost, even though the bill does not arrive until after you get the keys. Because the welcome tax can be estimated before you buy, it is an expense you can plan for and include in your purchase budget alongside legal fees, inspection costs and other upfront expenses.

Who is exempt?

Not every property transfer triggers a welcome tax. Quebec law provides exemptions in specific circumstances.

Transfers between spouses or civil union partners are exempt. This applies to both married couples and those in a civil union recognized under Quebec law. Transfers between common-law partners (conjoints de fait) can also qualify under certain conditions, depending on the duration of the relationship and other factors.

Certain property transfers between direct family members, such as parents and children or grandparents and grandchildren, may be exempt from the welcome tax, provided the transfer meets the applicable requirements.

Transfers of agricultural land registered as such are exempt, as are properties valued at less than $5,000.

Some corporate or business transfers may qualify for exemption depending on the structure of the transaction and the relationship between the parties. These situations are more complex and require verification with a notary.

If an exemption applies at the time of purchase but later ceases to apply (for example, if spouses separate within a specified period), the municipality must be notified within 90 days, or penalties can apply.

First-time buyer programs: the welcome tax still applies

The province of Quebec and the federal government offer programs to support first-time homebuyers, but none of them fully eliminate the welcome tax. The First Home Savings Account (FHSA) and the Home Buyers’ Plan (HBP) through RRSPs can help with the down payment and reduce borrowing costs, but the welcome tax remains a separate obligation to plan for.

Some municipalities offer their own rebate or credit programs for first-time buyers on the welcome tax. Montreal has offered such programs in the past. It is worth checking directly with your municipality before purchasing to see whether any relief is available.

Frequently asked questions

Can I pay the welcome tax as part of my mortgage? No. The welcome tax is billed by the municipality after closing and must be paid directly. It cannot be added to your mortgage. It is an out-of-pocket expense that should be budgeted for separately from your down payment and other closing costs.

What happens if I do not pay? Municipalities have authority to add penalties and interest on unpaid welcome tax bills. In extreme cases, unpaid municipal charges can result in a lien on the property. Pay within the 30-day window specified on the invoice.

Does the welcome tax apply to new construction? Yes. New construction purchases are subject to the welcome tax in the same way as resale properties. Note, however, that new construction also triggers GST and QST on the purchase price, which are separate from the welcome tax. New home buyers should review all applicable taxes before purchasing, as the combined burden can be significant.

I am buying with a partner who already owns a property. Are we still considered first-time buyers? For municipal welcome tax rebate programs where they exist, the eligibility rules vary by municipality. For federal programs like the FHSA or HBP, eligibility depends on each individual’s ownership history. If your partner has owned a property before, it may affect what programs are available to you jointly. A notary or mortgage professional can clarify based on your specific situation.

Are transfers for $1 to family members exempt? Symbolic sales at well below market value are still subject to the welcome tax, which is calculated on the market value of the property rather than the sale price if the stated consideration is clearly lower. A transfer to a family member at no or nominal cost may qualify for an exemption, but the transaction needs to be structured correctly. This is not a situation where a verbal arrangement will suffice. The exemption must be properly documented before a notary.