According to law, every municipality must collect duties on the transfer of ownership of any immovable situated within its territory. The property transfer tax is payable in a single installment, within 30 days of the billing date.
The right of ownership of a property is transferred when an act of transfer is published in the land registry office, as in the following cases:
- A deed of sale;
- A rental contract on a property exceeding 40 years;
- An emphyteutic lease;
- The transfer of an emphyteutic lease;
- A deed of a gift;
- The transfer of ownership following the death of the (or one of the) owner(s).
The property transfer tax is applied to all property transfers. It is the purchaser of the property who must pay the transfer tax. If there are several purchasers, they are held jointly responsible for the payment of the transfer tax.
The transfer tax is calculated on the greater of the three following amounts:
- the amount of the consideration furnished for the transfer of the immovable, excluding TPS and TVQ (the sale price);
- the amount of the consideration stipulated for the transfer of the immovable (the price stipulated in the notarial deed);
- the amount of the market value of the immovable at the time of its transfer.
When a property constitutes an individual entry on the valuation roll, its market value is the value shown on the roll multiplied by the comparative factor, at the time of transfer.
- For 2023: Market value = Value on valuation roll x 1.20 (comparative factor)
For the calculation of the property transfer tax, a comparative factor is determined each year and provides a means to standardize all the valuations entered on the roll in effect. It is established every year by the City assessor and is approved by the government.
The transfer tax is calculated in relation to the base amount according to the following rates:
- portion of base amount up to $55,200: 0,5 %
- portion of base amount between $55,200.01 and $276,200: 1,0 %
- portion of base amount between $276,200.01 and $500,000: 1.5 %
- portion base amount exceeding $500,000.01: 3,0 %
Take, for example, a property purchased for $520,000, whose value on the roll is $527,000 and consideration stipulated is $520,000.
Market value = Value on valuation roll x Comparative factor:
In 2023 : $527,000 X 1.20 = $632,400
The higher of the following three amounts is taken as the base amount:
- The consideration stipulated: $520,000
- The market value: $632,400
- The sale price: $520,000
Thus, the taxation basis is $632,400. The transfer tax is $9,815 for 2023, calculated as follows:
- $55,200 X 0,5 % = $276
- $221,000 X 1,0 % = $2,210
- $223,800 X 1,5 % = $3,357
- $132,400 x 3 % = $3,972
In certain cases, a buyer may be exempt from paying the transfer tax. To benefit from an exemption, the notary must include a note in the deed of sale pertaining to the type of exemption requested. The Ville de Saint-Lambert reserves the right to request documents justifying the exemption. It should be noted that even if a transaction is exempt, a special duty may still apply.
Main situations that benefit from an exemption:
- Taxable amount is less than $5,000;
- Transfer is to an ascendant or descendant relative in the direct line (transfer from father to son, from daughter to mother);
- Transfer is between spouses of the opposite or same sex, whether married or living in a common law marriage;
- Transfer occurs as a consequence of the death of a person who is directly bound to the transferee;
- Purchaser is a public body within the meaning of the law;
- Seller is a physical person and the purchaser is a corporation of which the seller owns at least 90% of the voting shares;
- Transfer is by the municipality of a property that was acquired under the Act Respecting Municipal Industrial Immovables;
- Repossession of the property is by a mortgage company, or other loan company
If you have any questions, please call the INFO-TAXES line at 450 466-3128 or send an e-mail at email@example.com.