Can You Be Exempt from the Welcome Tax?

Approximately 3 to 6 months after your visit to the notary to finalize your real estate transaction, you will receive a bill to cover the property transfer duties, commonly known as the Welcome Tax. You will have 30 days to pay it in a single installment. This tax applies throughout Quebec.

But is it possible to be exempt from paying this transfer tax?

The answer is yes! But only in certain cases.

In fact, in some cases, you can be exempt from paying the Welcome Tax. According to the Association of Notaries of Quebec (APNQ), here are the most common situations for being exempt from property transfer duties:

1. Transfer to a Direct Family Member

A person can be exempt from paying property transfer duties if they acquire a property from a direct ascending or descending family member. This excludes transfers between siblings.

2. Transfer Between Spouses

If the transfer is made before a potential divorce is finalized (within the 12 months preceding the property transfer), it is possible to obtain an exemption in the case of a transfer between spouses.

3. A Tax Base Under 5000 Dollars

Example: If you transfer a small plot of land for less than 5000 dollars, you will be exempt from the transfer tax.

4. Transfer Between a Shareholder and Their Company

If you own a business (holding more than 90% of the shares) and decide to transfer your property to your company, you could be exempt from the Welcome Tax.

Conclusion

It is therefore possible to be exempt from the Welcome Tax in certain specific cases. For more information, consult your real estate broker. Working with several real estate professionals, Gail Meili, a real estate broker in Saint-Lazare and Hudson, can answer your questions or direct you to the right experts. You can contact her by email at gailmeili@icloud.com or by phone at 514 969-4134.