Closing Costs in Quebec: Welcome Tax, Notary and More

Buying a home in Quebec runs through a notary rather than a lawyer, and three of its costs work differently from the rest of Canada. The transfer duties, known as the welcome tax, are billed by the municipality after the sale rather than paid on closing day. The seller normally supplies a certificate of location, the Quebec counterpart of a survey. And the mortgage itself has to be signed before a notary. To estimate your own total, use the closing cost calculator and choose Quebec; the closing costs hub has a guide to each cost and each province.

The welcome tax

Quebec’s transfer duties are collected by every municipality on brackets that change every year; Montreal’s start at 0.5% and reach 4% on the part above $3,113,000, and the brackets for Montreal and Quebec City are on Quebec welcome tax. Quebec’s new refundable credit for first-time buyers repays part or all of the duties, and the same page covers who qualifies.

The notary and the hypothec

Under article 2693 of the Civil Code of Québec, an immovable hypothec (a mortgage on real estate) must be granted by notarial act en minute, a deed a notary draws up and keeps, or it is absolutely null. The notary does the work a real estate lawyer does elsewhere in Canada: searching the title, preparing and publishing the deed of sale and the hypothec at the land registry, holding the funds in trust and preparing the adjustments for property and school taxes that the statement of adjustments explains.

The certificate of location

A certificate of location is a land surveyor’s report and plan showing the property’s boundaries, the buildings on it, any servitudes and anything that encroaches or doesn’t comply with zoning. The seller usually provides a recent one that reflects the property as it is; if theirs is out of date, who pays for a new one is part of the negotiation. Some buyers use title insurance, which covers some of the same risks.

Tax on the mortgage insurance premium

Quebec’s tax on insurance premiums also applies to a mortgage default insurance premium, and it’s paid from the buyer’s funds at closing rather than added to the loan; PST on mortgage default insurance gives the rate, and the CMHC insurance premium calculator shows how the premium is set. On a newly built home, both GST and QST apply to the price, and the GST/HST new housing rebate covers the federal part that can be returned.

Example: a Montreal condo with 20% down

The same purchase in Ontario would go through a lawyer and carry a land transfer tax paid on closing day, and closing costs in New Brunswick rest on a flat transfer tax. Quebec’s help for first-time buyers is in the Quebec first-time home buyer guide.