Frustrated with the welcome tax, some home owners are questioning where the fee goes.
Introduced in 1976 by the appropriately-named minister Bienvenu, the property-transfer payment was optional until 1992.
All municipalities in Quebec levy an amount on the sale of immovable property in their territory. The amount, officially known as the duty on transfers of immovables, is commonly referred to as the welcome tax. Paid by the purchaser, the tax is based on the highest of the following three amounts:
- the price paid for the property;
- the amount recorded in the deed of sale;
- the value entered for the property in the municipal taxation roll.
The amount is paid regardless of how far away a home buyer is moving - even if it's a condominium in the same building.
"A welcome tax to move into the same municipality that's the biggest frustration, especially that amount of money," said Patrick Muyal, who owes $4000 after moving into a condo three doors over in the same building.
After five years in his condo, Muyal and his growing family plan to relocate to the new spot next month because it's a larger space.
"They've got welcome tax, they've got property tax school tax. I mean it's enough. They've got to stop taxing," said Muyal.
The City of Montreal collected $89 million in both 2007 and 2008 due to the tax, and this year, it projects to collect $99 million.
The money is placed in the city's general fund - meaning it can be used for any reason, including repairing sewers, water mains, increased services - anywhere on the island of Montreal.
Governments, school boards, non-profits organizations and sales from parent-to-child are the only loopholes in the tax.
Otherwise, the hard truth is, everyone has to dish out the funds.
"Each time there is a transaction, each time you change owners in the registration office of the municipality, you will have to (pay) these taxes," said Emilio Boulianne, associate professor at the John Molson School of Business.
