When do I have to pay my « Welcome Tax » (mutation tax) ?
Once the sale is signed at your Notary’s office, your Notary will register your sale at the Registry Office. This registration lets the public, including the city, know that you’re now the new owner of the property! This registration triggers the “Welcome Tax” bill which is mailed to you directly by the city a few days/weeks after you signed the sale at the Notary’s office. Once you receive the bill, you have 30 days to pay it. Some cities are faster than others at sending you this bill! Some cities might even include the “Welcome Tax” in you municipal taxes of the following year.
New constructions : when buying a new construction (example: a condo in a newly built tower), the city is slower and can take several months up to a couple of years before sending you the “Welcome Tax” bill.
When you sign you sale with you Notary, he or she will confirm the exact amount you can expect.
What fees can I expect when buying a property ?
Notary fees for the purchase
Municipal and school taxes adjustments (if the previous owner paid the taxes in advance, you’ll need to reimburse the extra amount on the day of the sale. You don’t have the option of spreading that amount over the year. So if you buy your property in February but the owner had paid the property taxes until December 31st, you’ll have to pay almost a full year of taxes back).
Condo fees adjustments (if the previous owner paid the condo fees in advance).
Adjustment of the oil tank/fuel reserves. If you buy a house that uses oil or dual energy heating, you’ll need to reimburse the value of the oil/fuel reserves still in the tank. A standard oil tank contains about 900L.
Duties on transfers (Welcome tax)
Depending on the bank/Caisse/institution you’re financing the purchase with, you may have to pay for something called titre insurance. Your Notary will explain if that applies to you!
These are the most common fees to expect but do not constitute an exhaustive list. Your Notary will confirm which fees apply and do not apply after receiving your file.
If I’m buying alone, should my spouse be present?
Not always. If you’re married and if the property is meant to serve as your main residence or secondary residence (like a cottage), then your spouse will need to sign the mortgage contract with you. This is a rule imposed by the law (Civil code of Québec).
If you’re buying the property without a mortgage or a bank loan OR if the property will not serve as a main/secondary residence (example: a rental property you’re buying as an investment and in which you will not live), then your spouse will not need to sign with you.
What documents should I prepare before contacting a Notary about my will?
- 2 photo ID’s;
- Your social insurance number;
- That’s it!
I heard I could prepare my own will and for free, is that true?
TRUE – there are 3 different types of will in Québec:
Holograph will: a will you write yourself by hand and that you sign by yourself.
Will made in the presence of witnesses: a will you write yourself by hand or on the computer and that you sign with 2 witnesses.
Notarial will: a will drafted by a Notary and signed by you in the presence of the Notary and of a witness.
The first 2 types of wills (holograph or in the presence of witnesses) are in fact free. The issue here is that after the death, these wills must be verified in court. The verification process is mandatory and costs on average 4 to 6 times more than the cost of a notarized will! With a notarized will, there is no process of verification and you can benefit from the advice of an expert.