The personal taxes that we have to pay will vary based on where we are located. On our income tax returns we can see that there are Federal (across Canada) and Provincial tax rates for things such as our employment (and other) earnings. Federally and provincially, there are also a wide number of tax credits we can utilize, again, depending upon where we live.
However, let’s take a minute to look outside of the Federal and Provincial taxes, where there are a number of taxes (or fees) that we as residents or visitors, must pay to the city we are living in or visiting.
Here are a few taxes (or fees) to consider when thinking of living in or visiting the beautiful city of Montreal, Quebec:
Like anywhere in Canada, if you are planning to purchase a home, whether a single dwelling or condo, you will need to pay property taxes based on the size of your property, the type of property, and the municipal rates for that property. Before purchasing, you can investigate what type of cost you might expect by going to the municipal website and reviewing the property tax information. Most cities have a section on their website about “Living Here”, so take time to review that as it will give you a lot of insight as to what you might expect about living in that city compared to what you’re used to. Generally, cities were the homes are higher in value, you’ll see lower property taxes, and higher taxes, in cities with lower property values. According to research, in 2019, Montreal saw property tax rates of 0.76720%, putting them higher than Toronto and Vancouver, but lower than Edmonton and Halifax*.
Land Transfer Fees
Land transfer fees are usually overseen by the province, not the municipality per se, but it is where the land/property is located that is going to dictate the rate. According to 2018 research by Zoocasa, Montreal had the 8th highest land transfer fees in cities across Canada, being 1.1% of the purchase home price. Though Montreal ranked 8th, that is due to the fact that home prices in Montreal are higher than other cities, like Quebec City, which though has a higher rate of 1.8%, has lower average home prices resulting in lower land transfer taxes.
Local Improvement Taxes
In some boroughs in Montreal, if work is being done to improve the area, such as infrastructural work for development (water supply, sewage, etc.), the property owners that will benefit, will have to pay this localized tax to fund the work.
Business Taxes or Licenses
Every city will have different rules on who can do business in that city, if they will be required to hold an operator’s license or a bylaw. If you intend to operate a business in Montreal, make sure you investigate what your business requires, before opening the doors. Check out the Starting A Business page of the Revenu Quebec website for more specific details.
In recent years some major cities have instituted a hospitality tax or surcharge for people visiting and staying at hotels in that city.
Called Tax on Lodging, it is designed to bring money into the city to help bolster services for tourism or municipal programming.
In Montreal, this tax is 3.5% and applies to every over-night stay.
If you own property in Montreal and wish to rent it out for tourism purposes (think AirBNB) for a period of 31 days or less, require a certificate from the Ministry of Tourism. Under the Act respecting municipal taxation, there could be an impact on the property taxes as the property may become part of the non-residential taxation category.
Water and Utility Fees
Though not a tax, it is good to know what to expect when moving to a new city in terms of their water, utility and sewage removal rates. In some cities, these costs are a part of your property taxes, but it is important to know in advance if they are not, so you can avoid an unpleasant surprise in your bills.
Zoocasa: Real estate research tools and data for Canadian home buyers/owners
Accounting educator, business strategist, and advisor.
Turbo Tax Canada blog editor and writer.
Susan has been an accounting professional for over 20 years and has been working with businesses and individuals and their taxes for the past 13. Education is a passion for Susan, and when not writing or talking about tax for TurboTax Canada, she can be found speaking at events, teaching at Mohawk College, and working with many businesses, bookkeepers and accounting firms as part of her education offerings and her Find Our Bookkeeper™ recruitment program. Susan is known to be approachable but pulls no punches when it comes to the reality of business finance, taxes, and the importance of education.