Rebate of the Welcome Tax for first-time homebuyers in Quebec: Everything you need to know
The Government of Quebec has recently announced a measure to ease the financial burden on first-time home buyers by reimbursing a portion of the land transfer tax, commonly known as the “welcome tax.” This initiative, retroactive to January 1, 2026, aims to facilitate homeownership for Quebecers.
What is the welcome tax?
The welcome tax is a land transfer tax charged by municipalities when purchasing a property. It is calculated based on the purchase price or the property's fair market value. This amount can represent a significant sum, adding extra financial pressure for new homeowners.
The reimbursement program: Details and conditions
The new reimbursement program offers first-time buyers a refundable tax credit to access homeownership. The main features of this program are:
- Amount of the reimbursement: Buyers can recover the entire first $5,000 paid in land transfer taxes. Additionally, 25% of the taxes paid beyond this amount are reimbursed, up to an additional maximum of $875. Thus, the total reimbursement can reach $5,875.
- Eligible properties: The measure applies to homes valued under $1 million. For properties priced between $750,000 and $1 million, the credit is gradually reduced until it completely phases out at the $1 million threshold.
- Eligibility conditions: To benefit from this reimbursement, the buyer must:
- Have acquired a residential property after December 31, 2025.
- Not have been the owner of a dwelling in the previous four years.
- Occupy the property as a primary residence.
Concrete examples
Here are some scenarios illustrating the amount of reimbursement based on the purchase price:
- Property valued at $460,000: The total reimbursement would be $5,000, corresponding to the entire first $5,000 paid in land transfer taxes.
- Property valued at $750,000: The reimbursement would be $5,875, including the $5,000 reimbursed for the first $5,000 paid in land transfer taxes and 25% of the remaining $3,500, or $875.
- Property valued at $1,000,000: No reimbursement applies, as the measure phases out for properties valued at $1 million or more.
Steps to follow
To benefit from this reimbursement, buyers must:
- Keep all relevant documents: Make sure to retain the land transfer tax declaration and any other documents related to the purchase of the property.
- Submit an application: The reimbursement will be provided through a new refundable tax credit for homeownership. The initial payments are expected to be made as early as next fall.
- Consult official resources: For detailed information and precise instructions, it is recommended to consult the official Government of Quebec website or contact Revenu Québec.
Practical tips
Plan your budget accordingly: Incorporate the estimated reimbursement amount into your financial planning to better manage costs related to purchasing the property.
Stay informed: Program details may evolve. Regularly check official sources for the latest information.
Consult a professional: Before finalizing your purchase, it may be wise to consult a notary or financial advisor to ensure you meet all eligibility requirements and maximize your benefits.
Sources
