Duties on Real Estate Transfers

A transfer is defined as:

• the transfer of the right of ownership on a property between living persons or, following a death and bequest, the transfer of succession property and the sale of property by court order;
• the contract of lease on a property, provided the term exceeds 40 years;
• the establishment of emphyteusis and the transfer of the rights of the emphyteutic lessee.

Under the act, the basis for taxation is the greatest of the following amounts:

• the amount actually paid for the transfer of the property;
• the amount of the consideration established for the transfer of the property;
• the market value of the property at the time of its transfer.

Note that the market value is the value entered on the assessment roll multiplied by a comparative factor set by the Direction d’évaluation foncière and approved by the Ministère des Affaires municipales et de l’Habitation.

The comparative factors for Town of Mount Royal for the 2021, 2022, 2023 and 2024 fiscal years are: 

• Year 2021: 1.06
• Year 2022: 1.18
• Year 2023: 1.00
• Year 2024: 1.10

The following explanation of the factor will be found in the first paragraph of section 264 of the Act respecting municipal taxation: 

“For each fiscal year for which the property assessment roll applies, the assessor shall establish the median proportion of the actual property value of the units of assessment to which the values entered on the roll correspond. The assessor shall also indicate the comparative factor of the roll, which is the inverse of the median proportion.”

Below are the parameters used in calculating the transfer duties.

Effective January 1, 2024, the applicable thresholds and rates are as follows: 

Parts of the basis of imposition and corresponding tax rates starting January 1, 2024

For the section of the tax base:

• That does not exceed $58,900, the rate is 0.5%;
• That exceeds $58,900 but does not exceed $294,600, the rate is 1%;
• That exceeds $294,600 but does not exceed $589,200, the rate is 1.5%.
• That exceeds $589,200 but does not exceed $1,178,500, the rate is 2%.
• That exceeds $1,178,500 but does not exceed $2,279,100, the rate is 2.5%.
• That exceeds $2,279,100, the rate is 3%.

Parts of the basis of imposition and corresponding tax rates starting January 1, 2023

For the section of the tax base:

• That does not exceed $55,200, the rate is 0.5%;
• That exceeds $55,200 but does not exceed $276,200, the rate is 1%;
• That exceeds $276,200 but does not exceed $552,300, the rate is 1.5%.
• That exceeds $552,300 but does not exceed $1,104,700, the rate is 2%.
• That exceeds $1,104,700 but does not exceed $2,136, 500, the rate is 2.5%.
• That exceeds $2,136,500, the rate is 3%.

Town of Mount Royal sends the transfer tax bill to the residential address shown on the certificate issued by the assessor. All further correspondence (tax bill, reminder, etc.) will also be sent to this address. We therefore recommend that you notify us as soon as possible of any change of address. Note that not having notified the Town of a change of address cannot be used as justification for a late payment (due to not having received the transfer tax bill).

Some property transfers may not be entered in the land register. However, even if the transfer has not been published, the acquirers nonetheless have to pay the resulting transfer taxes. In such cases, the transferee is required to disclose, in the 90 days following the date of the transfer, the related information using the Divulgation transferts d'immeubles form (available in French only). The completed form should be sent to Town of Mount Royal accompanied by a copy of the bill of sale and the secret mandate, if applicable. The Town will then issue a transfer tax bill. Failure to duly disclose an unregistered transfer is punishable by a financial penalty that is added to the transfer tax initially payable; interest may also be charged and added to the amount due.

Taxpayers with questions can email us at treasurer@town.mount-royal.qc.ca.

An acquirer may be exempted from paying the transfer tax in cases specified in the Act respecting duties on transfers of immovables (CQLR, c. D 15.1). For the acquirer to qualify for the transfer tax exemption provided by law, the notary must add wording to the effect in the bill of sale (or deed of transfer).

The main situations that qualify the acquirer for an exemption are:

• Transfer to an ascendant or descendant in the direct line (sale from father to son, from grandmother to her granddaughter, etc.);
• Transfer made by a transferor who is a natural person (i.e. a physical person) to a transferee that is a legal person (i.e. a company) if, immediately after the transfer, the transferor owns shares of the capital stock of the transferee carrying at least 90% of the voting rights that may be exercised under any circumstances at the annual meeting of shareholders of the transferee. This applies when a taxpayer transfers his or her property to his or her company;
• Transfer between spouses, be they married or in a civil or de facto union (as defined in the Act respecting duties on transfers of immovables). Same-sex spouses are covered by this provision of the act.

Note that to qualify for the exemption, de facto spouses who separate due to the breakdown of their union have 12 months after their separation in which to execute the transfer, beyond which the transfer is no longer exempt. For their part, married and civil union spouses have 30 days after the date of their judgement of divorce in which to execute the transfer if the judgement of divorce did not assign the property to either of the spouses.

For some exemptions, the act provides that the conditions that qualify the transfer for the exemption must remain in effect for a specified time after the transfer. This means the exemption can be retroactively cancelled if, at any point during the period, the conditions that initially qualified the transferee for the exemption are no longer met. In particular, this would be the case when a legal person transferee was exempted from paying a transfer tax due to the transferor’s having held at least 90% of the voting rights. In other words, a shareholder can make a transfer to a company that he/she controls with at least 90% of the voting shares provided this shareholder remains the holder of these voting rights that qualified his/her company for the exemption and remains so for the entire period specified in the act, namely 24 months following the transfer.

The transferee is required to disclose the cessation of the exemption using the Notice of disclosure from a transferee who no longer meets the conditions for exemption from the payment of transfer duties, failing which the transferee will be billed not only the transfer tax due but also a penalty and possibly interest. A second form, made of appendices, is available to provide extra information regarding additional transferors, transferees or authorized persons, or transferred movables. The completed forms should be sent to Town of Mount Royal. The other exemptions that remain in effect for a specified time period mainly concern transfers between related legal persons or between a legal person and a natural person who is its controlling shareholder.