Quebec Mortgage Payment Calculator 2024

Located in central Canada, Quebec is the largest Canadian province by area, covering a total of 1,542,056 square kilometers in area (source: Statistics Canada). Quebec is Canada’s second most populous province and was estimated to have a population of almost 8.7M on July 1, 2022 (source: Quebec population estimates). With a GDP of over $504k million, Quebec accounted for about 20% of Canada’s GDP at market prices in 2021 according to the income-based GDP estimates of Statistics Canada. The median after-tax income in Quebec for the year 2020 was $59,700, $7,100 lower than the national median (source: Statistics Canada).

Like the rest of Canada, the Quebec housing market also saw house prices increase during the pandemic and reach their peak in the first half of 2022. While the prices peaked in most provinces in February 2022, the average house price in Quebec reached a peak of $494,429, in May 2022. After this peak, the prices started to fall because of the continuous Bank of Canada rate hikes and increasing mortgage rates. In November 2022, the average home price in Quebec was $443,008, representing an annual decrease of 1.2%. This is a decrease of 10.4% compared to the peak in May. The largest housing market in Quebec is the Montreal housing market. The following graph shows the variations in average prices in the Montreal housing market from November 2021 to November 2022.

Montreal House Prices

Montreal housing market was the most expensive market in Quebec in the month of November 2022 with an average sold price of $560,074. The average price of homes sold in the Quebec City CMA for the month of November 2022 was $359,780. The Quebec housing market is much more affordable than the Ontario housing market and British Columbia housing market. Most of the houses in Quebec are priced under $1,000,000 and therefore qualify for CMHC mortgage insurance, requiring only 5% in downpayment for houses up to $500,000 in price and 10% for houses priced up to $1M.

Following were the median prices for different home types in the major cities of Quebec in November 2022.

Montreal CMA

Quebec City CMA

Closing costs should be accounted for when you plan to buy a house. This can be a significant cost and are generally required to be paid upfront or within a short time of the transaction. The following costs and fees are a part of closing costs.

• Welcome Tax (Land Transfer Tax)
• Legal Fees
• Property Survey
• Home Inspection
• Property Appraisal
• Title Insurance
• Government Registration Fees

It is good to budget for 3% - 4% of the house price to cover closing costs. The most significant cost from the above is the welcome tax. If you are eligible for Montreal’s Home Purchase Assistance Program, you could receive a lump-sum amount or a refund on the welcome tax. The fees and costs can vary on the basis of location, type and size of a property. You can consult with local service providers in order to gain an understanding of the fees you would require to pay.

In Quebec, the real estate transfer tax or land transfer tax is commonly known as the welcome tax. This tax is payable to the city and is calculated at a marginal tax rate. The tax is calculated on the sale price of the property or the assessed value multiplied by comparative factor for the year, whichever is higher. The welcome tax marginal rates for Montreal and Quebec City for the year 2023 are listed below:

For example, if you purchase a property at $500,000 in Montreal, the welcome tax would be a total of -

• For first $55,200 - $55,200 × 0.5% = $276
• For $55,200 up to $276,200 - $221,000 × 1.0% = $2,210
• For $276,200 to $500,000 - $223,800 × 1.5% = $3,357

The total property transfer tax payable would be $5,843.

Buyers in Montreal can benefit from the home purchase assistance program extended by the city. There are two kinds of benefits that the buyers may receive:

• A lump-sum benefit on purchasing a newly constructed home.
• A refund of the welcome tax on purchasing an existing property.

The benefit depends upon the following factors:

• Type of buyer - First-time buyer or experienced buyer
• Property type - Existing or new
• Household type - Single buyer without children, multiple buyers without children or household with at least one child
• Maximum purchase price - House price up to which the benefit is available
• Location - If the home is located in downtown Montreal or outside it

The following matrix shows the maximum benefit for different circumstances:

A real estate transaction is usually worth hundreds of thousands of dollars and any mistake in the transaction can be extremely costly. Hiring a real estate lawyer can ease a lot of your stress and ensure that you are getting a fair deal while buying a house. A real estate lawyer will protect you against any potential fraud and guard your interests. Unlike in Ontario, it is not a requirement to have a lawyer to represent you in a real estate transaction; however, it is strongly recommended. A lawyer may charge you between $500 - $1,500 for a real estate deal, and you might have to pay extra disbursement fees for bank transfers, title searches and other third-party expenses.

If you are a resident of Quebec, you can claim a tax credit if one of the following is true for you:

• You qualify as a first-time homebuyer and purchase a qualifying home with the intention of making your principal residence.
• You purchased a qualifying home and intend to make it the principal residence of a person with disability who is related to you. The home should be more accessible or better suited to the needs of the disabled person.

The maximum amount of the tax credit per home is $750, which can be split among multiple taxpayers who are eligible to claim the tax credit.

Eligible families can receive an interest-free and installment-free loan equivalent to 5.5% of the purchase price when they buy a newly constructed home with an acquisition price of $330,000 or under. This amount is the downpayment paid by the city and is known as the accession credit. To qualify, the property must be located on the territory of Quebec City and have at least two bedrooms and a minimum storage space.

The reimbursement of the credit occurs in one of the following events:

• The sale of property
• Refinancing of mortgage
• The property is rented
• At the end of amortization period (usually 25 years)

At the time of reimbursement, 5.5% of the capital gained on selling the property must be paid to the city.

Starting January 1, 2023, foreign nationals, foreign corporations and taxable trustees will be banned from buying real estate in Canada for two years. Individuals who are neither citizens nor permanent residents of Canada fall under the definition of foreign nationals. Leaving the ban aside, Quebec is friendlier to foreigner buyers compared to Ontario and B.C., who charge them an additional tax on the purchase of property.

The cost of living in Quebec is much lower than Ontario, British Columbia and Alberta. One of the main reasons for this is cheaper real estate. As an example, the average monthly housing cost for a family of three in Toronto is around $2,000, that in Vancouver is around $2,150, while it is around $1,700 in Calgary; however, the same cost in Montreal is around $1,200. On average, a family of three can expect to spend $5,000 on housing, food, transport and childcare in Toronto and Vancouver, and $4,700 in Calgary; but a family of three in Montreal will spend an average of $3,050 on the same.

In 2022, high inflation rates have increased the cost of living across Canada, including in Quebec. The inflation rate in Quebec in the month of October 2022 was 6.4% as per the Statistics Canada’s Consumer Price Index data, slightly lower than the national inflation rate of 6.9%. The inflation rate for food was almost 11%, and the inflation rate for energy was over 13%. The core inflation rate, excluding food and energy, was about 6%. The gas prices inflated at a rate of 15% in October 2022.

Quebec’s population is expected to cross the 10M mark by 2066, growing by 1.5M compared to 2020 according to the population projections published in 2021. This is a projected growth of 17.6%. In the same time frame, the share of seniors in the population is expected to increase from 20% to 27% indicating an aging population trend. An aging population will require the government to spend more on healthcare and pensions in the future, while the revenue collected in tax would decline, posing economic challenges.

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Property owners are required to pay property taxes to the local municipality every year for city services such as police, garbage collections, fire department, public transit and schools. The property’s assessed value is used as a base for calculating the property taxes and the tax rates are revised every year as per the budget needs of the borough in which the property falls. The assessed value of a property is almost always lower than its fair market value.

Property tax rates in Quebec include two main components –

• A municipal tax rate decided by the borough
• An education tax rate fixed by the province (same across the province)

Apart from these, there can be other special taxes levied by the borough.

The property tax rates for some of the major municipalities in Quebec are listed below.