Welcome Tax and Municipal Taxes in Montréal (2026): Guide for an Income Property

Montréal applies the most progressive welcome tax scale in Quebec: 7 tiers that rise from 0.5% to 4.0% for transactions above $3,113,000. On a $2,000,000 income property the duty works out to approximately $39,800 — significantly less than in municipalities that cap at 3% above $500,000, but the 2.5% tier that applies to the portion between $1,104,700 and $2,136,500 still represents a substantial closing cost. Combined with property taxes running around $0.46 per $100 of assessed value for buildings of 6 or more units, Montréal's tax burden on a multiplex is substantial and must be factored into any yield analysis. This guide details the full 2026 scale, walks through the bracket-by-bracket calculation, and reviews the available exemptions. Figures are indicative (2026): confirm with the City of Montréal and the assessment roll.

What is the welcome tax and who pays it in Montréal?

The buyer pays the transfer duty — not the seller. The City of Montréal bills the new owner after the deed is registered, typically within weeks to months of closing. The amount is calculated on the tax base (highest of price paid, deed consideration, or standardized assessment value) using a 7-tier progressive scale.

The "welcome tax" is the popular name for the real property transfer duty (droit de mutation immobilière). It is governed by the Act respecting duties on transfers of immovables and applies each time a property in Montréal changes hands — whether it is a condo, a duplex, or a large apartment building.

The essential point: the buyer pays this duty, not the seller. The City of Montréal bills the new owner after the deed is registered, typically within weeks or months of signing before the notary. For the general provincial mechanism and thresholds, see our guide on the welcome tax and our provincial overview article Welcome Tax 2026.

What is Montréal's welcome tax scale for 2026?

Montréal's 7-tier 2026 scale: 0.5% (up to $62,900) · 1.0% (up to $315,000) · 1.5% (up to $552,300) · 2.0% (up to $1,104,700) · 2.5% (up to $2,136,500) · 3.5% (up to $3,113,000) · 4.0% (above $3,113,000). Thresholds are indexed annually — confirm current values with the City of Montréal.

Montréal has enacted supplemental municipal rates that go well beyond the basic provincial scale, creating 7 brackets. Here is the complete applicable scale:

Source: provincial brackets from the Act respecting duties on transfers of immovables (CQLR c D-15.1); municipal brackets from the City of Montréal's transfer duty by-law. The provincial thresholds ($62,900; $315,000; $552,300) are indexed annually and the municipal thresholds ($1,104,700; $2,136,500; $3,113,000) may be adjusted by the City. Confirm current values with the City of Montréal before closing.

What is the tax base?

The duty applies to the highest of: the price paid, the consideration stipulated in the deed, and the standardized assessment value (roll value multiplied by the comparison factor). For an income property, the roll value may be established on an income approach, so it can track the sale price closely.

Welcome tax calculatorEstimate the transfer duty from the purchase price or assessed value.

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How much is the welcome tax on a $2,000,000 income property in Montréal?

Approximately $39,825: $314.50 (0.5%) + $2,521 (1.0%) + $3,559.50 (1.5%) + $11,048 (2.0%) + $22,382.50 (2.5% on $895,300). This is notably lower than the ~$50,610 charged in suburbs applying a flat 3% above $500,000 on the same property. Figures are indicative for 2026 — confirm with the City of Montréal.

Applying the 2026 Montréal scale to a $2,000,000 property (assuming the price is the highest amount and equals the tax base):

• $62,900 × 0.5% = $314.50
• ($315,000 − $62,900) = $252,100 × 1.0% = $2,521.00
• ($552,300 − $315,000) = $237,300 × 1.5% = $3,559.50
• ($1,104,700 − $552,300) = $552,400 × 2.0% = $11,048.00
• ($2,000,000 − $1,104,700) = $895,300 × 2.5% = $22,382.50
• Total ≈ $39,825

The welcome tax would be approximately $39,800 on this transaction. Compare this to a municipality applying 3% above $500,000 on the same property, where the duty would be about $50,600 — Montréal's multi-tier structure is actually more favourable for properties in the $1–3M range. These figures are indicative (2026); indexed thresholds must be confirmed with the City of Montréal.

To put this cost in a profitability context, use the cap rate calculator and the GRM calculator.

What property taxes apply to an income property in Montréal?

For 6+ unit buildings in Montréal, the 2026 property tax rate is approximately $0.46 per $100 of assessed value — roughly double that of owner-occupied homes. The rate varies by property category and borough. Income properties are assessed using an income approach. Confirm exact figures with the City of Montréal.

Separate from the one-time transfer duty, income property owners in Montréal pay annual property taxes. For buildings of 6 or more units, the 2026 rate is approximately $0.46 per $100 of assessed value — roughly double the rate for an owner-occupied home.

Important nuances:

• The rate varies by property category (1–5 units vs. 6+ units vs. non-residential). Confirm the applicable category with the City.
• Borough charges and other tarifications (water, infrastructure) may be added depending on the borough.
• Income properties are assessed using an income approach, so the roll value is directly linked to the rents and the market cap rate — a rising market can quickly increase assessed values.

For the impact of income on valuation, see our tools for cap rate and GRM. The only authoritative numbers are on your tax bill and the City of Montréal assessment roll.

What transfer duty exemptions exist in Montréal?

Exemptions under the Act include: transfers between spouses (married, civil union, or qualifying common-law), between relatives in a direct line (parents–children, grandparents–grandchildren), certain corporate reorganizations, and a tax base below $5,000. All exemptions have strict conditions — confirm eligibility with your notary before closing.

The Act provides exemptions applicable across all Quebec municipalities, including Montréal:

• Transfers between spouses (married, civil union, or common-law couples meeting the statutory conditions).
• Transfers between relatives in a direct line (parents–children, grandparents–grandchildren) — relevant for real estate inheritance.
• Certain transfers to or from a corporation under strict conditions (control, continuity of ownership).
• Transfers where the tax base is below $5,000.

These exemptions are strictly governed. Have your notary confirm your eligibility before the transaction closes.

What is the impact for the seller and the buyer of a property in Montréal?

The seller pays no transfer duty. For the buyer, ~$39,825 in transfer duty on a $2M Montréal property must be provisioned at closing. For properties above $2.1M the 3.5%–4.0% tiers apply, making the duty heavier. As a seller, knowing this number helps you understand the buyer's offer logic and negotiate net proceeds effectively.

The transfer duty is paid by the buyer but affects the seller indirectly:

• For the buyer: on a $2,000,000 property, roughly $39,800 in transfer duties must be provisioned at closing, on top of notary fees and adjustments. This is a real "entry cost" to include in any yield analysis. Use the purchase offer calculator to model all costs.
• For the seller: a well-informed buyer factors acquisition costs into the price offered. Know your net proceeds, support your price with the property's actual income, and see our page on selling an income property in Montréal for the full process.

How and when do you pay the welcome tax in Montréal?

The City of Montréal usually mails the transfer duty bill 3 to 6 months after the deed of sale. Payment is due in a single instalment, before the 31st day following the mailing of the bill; interest accrues after that deadline. Keep the amount aside — it arrives well after closing.

Many multiplex buyers are surprised by the gap between signing and billing. Unlike property tax, the welcome tax is not collected by the notary on closing day: the City establishes it once the deed is registered, then sends a separate bill. In Montréal, as in most Quebec municipalities, that bill often arrives three to six months after the transaction — sometimes later. So keep the money aside; a buyer who "forgot" the welcome tax after finalizing financing can be caught having to produce tens of thousands of dollars months later.

The payment steps, from notary to City

Payment uses the same channels as other municipal taxes: financial institution, the City's online service, or by mail. According to the City of Montréal's official procedure, the bill is payable in a single instalment. Some municipalities adopt a by-law allowing instalment payments, but do not assume this option exists: absent a by-law, a single instalment applies and any delay triggers interest at the City's rate. The Government of Quebec confirms the duty is payable "before the 31st day" following the mailing of the bill (Quebec.ca — Duties on transfers of immovables).

The supplementary duty: the "hidden tax" on exempt transfers

Even when a transfer is exempt from transfer duties, the City can collect a supplementary duty: $0 if the base is under $5,000, 0.5% between $5,000 and $40,000, and a fixed $200 above $40,000. A "welcome-tax-free" family transfer is therefore not always entirely free.

Here is a trap few sellers know about. When a transaction benefits from an exemption — for example a transfer between spouses or from a parent to a child — the City does not collect the ordinary transfer duties, but it may, by by-law, claim a supplementary duty as compensation. It is a modest amount, but it exists and often surprises families who believed the operation was entirely free.

The supplementary duty scale is governed by the Act respecting duties on transfers of immovables and echoed by the City of Montréal:

In plain terms, as soon as an income property is worth more than $40,000 — that is, always, in practice — the supplementary duty is capped at $200. It is not a fortune, but it is a line to know: a "welcome-tax-free" transfer of a triplex assessed at $900,000 to a child will still cost $200 to the City, on top of the notary's fees. Compare that $200 to the roughly $15,000 in transfer duties a third-party buyer would pay on the same building and you grasp the full value of well-executed family planning.

Exempt does not mean no formalities

Do not confuse "exempt" with "nothing to do." To obtain the exemption, the family or spousal relationship must be declared in the deed and meet the conditions set out in the Act (common-law spouses for at least 12 months, direct ascending or descending line, etc.). An inaccurate declaration can trigger a retroactive claim for the full duties. It is the notary who validates eligibility and drafts the required wording: never assume a family transfer is automatically exempt without that verification.

Montréal or the suburbs: where does the welcome tax cost the most?

For a $2M property, Montréal (~$39,825) costs less than a suburb applying a flat 3% above $500,000 (~$51,400), but more than a city capped at 1.5% (~$28,000). Above $3.1M, Montréal becomes the most expensive again with its 4% tier.

People often say Montréal is "the city with the highest welcome tax." That is true for very high-value buildings, but false for the $1–3M range where most plexes and small multiplexes sit. The reason lies in the structure of the scales: many suburban municipalities apply, under their powers, a flat 3% tier on any amount above $500,000. Montréal, by contrast, tiers its rates (2%, then 2.5%) before reaching 3.5% and 4%. As a result, for a $2M property, the Montréal structure is gentler than a flat 3%.

Here is an illustrative comparison at four price points (2026 Montréal scale vs a hypothetical municipality applying 3% above $500,000). Amounts are rounded and indicative:

Illustrative calculations from the City of Montréal scale and a 3%-above-$500,000 assumption for the hypothetical municipality. Each city sets its own tiers: always confirm the actual scale of the municipality involved.

The lesson for a seller: do not assume "the buyer will pay a fortune in welcome tax because it's Montréal." On a $1–2M plex, the Montréal bill is often lower than a flat-rate suburb's. It is an argument you can raise in negotiation: the buyer's total entry cost is reasonable, which supports your price. To compare with the regime off the island, see our article on the provincial welcome tax scale.

GST, QST and other closing costs for an income property

The resale of a used residential rental building is generally exempt from GST and QST. The taxes mainly apply to new construction, major renovations and the commercial portion of a mixed building. On top of this come notary fees and pro-rata adjustments.

The welcome tax is only one piece of a transaction's tax puzzle. One question comes up constantly: do you pay GST and QST on the sale of an income property? Good news in most cases: the sale of a used residential rental building — a plex or residential multiplex that is not new and has not undergone major renovations — is generally exempt from GST/QST, according to Revenu Québec.

When do sales taxes apply?

• New building or one that underwent major renovations — the sale becomes taxable ("self-supply" rules and possible rebates).
• Commercial portion of a mixed building — a building with a ground-floor commercial unit may be taxable on that part, depending on use.
• Building held by a business registered for GST/QST — special self-assessment rules may apply between registered parties.

These situations are technical: a qualification error can cost tens of thousands of dollars. This is exactly the kind of case where we recommend consulting a tax specialist or accountant before signing.

The other closing costs

Beyond the welcome tax (paid by the buyer) and sales taxes, closing before the notary involves several items settled on the day:

For an income property, the adjustment of rents and security deposits deserves special attention: the seller remits the deposits held and the portion of already-collected rents covering the period after closing. An up-to-date rent roll avoids nasty surprises. Factor all these items into your purchase offer calculation to know your true net proceeds.

Understanding your Montréal property tax bill in detail

Property taxes are calculated on the triennial roll value multiplied by your category's rate. For 2026, the average residential bill rises about 3.8%, and roughly 3.4% for buildings of 6 or more units. The rate and increase vary by borough.

The welcome tax is a one-time cost; property taxes, on the other hand, recur every year as long as you own the building. They are calculated by multiplying the value entered on the assessment roll by the rate applicable to your category, then adding service and borough taxes. In Montréal, the roll is triennial: it sets a value for three fiscal years, and a "comparison factor" brings that value to current market when calculating the tax base for transfer duties.

The "6 units and over" category

A crucial point for investors: residential buildings of six units and over form a distinct tax category, whose rate is generally higher than a single-family home's. In 2026, the general rate for this category was around $0.46 per $100 of assessed value, for reference; the combined total rate (with water, services and borough charges) is higher and varies from one area to another. Consult the official 2026 City of Montréal tax rates for your precise category.

The 2026 increase

For fiscal 2026, the City adopted an average residential tax increase of about 3.8% across the agglomeration, according to Le Devoir. For the six-units-and-over category, the increase hovered around 3.4%. But these averages hide significant disparities: depending on the borough, the actual change in a bill can be noticeably lower or higher, especially where the roll moved sharply.

The triennial roll and why a new deposit matters

Because the roll is set for three years, a new deposit can reset your building's assessed value all at once — and with it your tax base and your annual bill. When a fresh roll lands in a rising market, income-property values can jump substantially, since the income approach ties the assessment to current rents and market cap rates. For a seller, this cuts two ways: a higher roll means a heavier annual tax line for the buyer to absorb, but it also signals appreciation that supports your asking price. Time your sale with an eye on the roll cycle, and keep a copy of your latest assessment notice and tax account ready for prospective buyers — it is one of the first documents a serious purchaser or a direct buyer like ImmoMulti will request during due diligence.

Because the assessed value feeds both your taxes and the building's valuation, factor it in when measuring the cap rate or the gross rent multiplier (GRM). A rising roll increases your taxes but also reflects potential appreciation. Finally, note that an owner can contest the value entered on the roll within the prescribed deadlines if it seems too high — a worthwhile step when the recorded value exceeds what the actual income justifies.

Common seller mistakes with municipal taxation

The costliest mistakes: believing the welcome tax hits the seller, assuming a sale to a third party is exempt, forgetting the supplementary duty on a family transfer, neglecting tax proration, or overestimating the Montréal bill in negotiation.

Having seen the mechanics, here are the traps that most often catch owner-sellers of multiplexes in Montréal:

• Believing the seller pays the welcome tax. False: it is always the buyer. The seller pays nothing on this account. Do not discount your price "to offset" a tax that is not yours to bear.
• Assuming a sale to a third party is exempt. Exemptions target family transfers (spouses, direct line) and a few specific cases. A standard sale to a third-party buyer never qualifies.
• Forgetting the supplementary duty on a family transfer. Even exempt, a transfer to a child costs up to $200 to the City. Modest, but real — plan it with the notary.
• Ignoring the highest tax base. Duties are calculated on the higher of the price paid or the roll value. If your roll exceeds the negotiated price, the buyer pays more — a reality to anticipate.
• Forgetting property tax proration. You bear the taxes up to closing; the adjustment at the notary can represent several thousand dollars. Provide up-to-date accounts.
• Overestimating the Montréal bill. On a $1–2M plex, Montréal often costs less than a flat-rate suburb. Use this argument rather than suffer it.

At ImmoMulti, we buy income properties in Montréal directly, with no brokerage fees, and our offer accounts for all of these tax realities. You know from the outset what net amount you will keep. To go further, see our guide on selling an income property in Montréal.