The average closing cost in Montreal is roughly $10,500 after taxes or approximately 2-4% of the final home sale price.
- Average home sale price: $370,000-$390,000
- Average total closing cost: $10,500*
- Expected closing cost range: $7,400-$15,600*
- Percentage of closing cost to home sale price: 2-4%
Remember, these averages are based on sample data. Your closing costs may vary based on your lender, the size of your loan and whether you’re paying in cash.
Buyers in Montreal are fortunate to pay a nominal amount in taxes on the closing costs through a land transfer tax called the Welcome Tax. There is a Welcome Tax for the municipalities outside of Montreal and a separate one for Montreal as well. It is based on a sliding scale in relation to the property price.
This is how the Welcome Tax is calculated in Montreal.
- $0-$50,900: 0.5%
- $50,900-$254,400: 1%
- $254,400-$508,700: 1.5%
- $508,700-$1,017,400: 2%
- $1,017,400+: 2.5%
For example, on the sale of a property valued at $400,000, you would be charged 0.5% on the first $50,900 ($254.50), 1% on the next $203,500 ($2,035) and 1.5% on the remaining $145,600 ($2,912) for a combined total of $5,201.50 in Welcome Taxes.
*Goods and Services Tax (GST) and Quebec Sales Tax (QST)
In Montreal, buyers must pay the GST, which is a 5% federal tax, as well as a provincial QST that comes out to 9.975%. These taxes are only payable on the sale of brand new properties. This can be on a presale high-rise condominium or on a newly built home.
Is there a GST and QST rebate?
Yes, there is a rebate that is available to homebuyers in Montreal. If you purchase a home with a sale price of $350,000 or less, you are eligible for a 36% rebate on the 5% GST you pay. This rebate is reduced on properties ranging from $350,000 to $450,000; anything above $450,000 is not eligible for a GST rebate.
For the QST, you can receive a 50% rebate on property sales of $400,000 or less, but up to a maximum rebate of $9,804.
For example, on the sale of a property valued at $400,000, you would have to pay a GST of $8,000 and a QST of $39,900. With the rebates, you would receive back $2,880 (36% of $8,000) and $9,804 (50% of $39,900 but up to a maximum of $9,804) for a total of $12,684 in tax rebates.
Montreal has average housing prices in Canada and because of this, their closing costs are fairly average. Because housing prices are relatively affordable in Montreal and the Welcome Tax is a very reasonable sliding scale tax rate, it helps to keep closing costs relatively low. However, if it is a brand new property you’re purchasing, the GST and QST will significantly drive up the closing costs.
Closing costs are inevitable when you’re buying a property. The exact amount will vary depending on what the final sale price is on your property in Montreal. Montreal’s average housing prices sit in the middle when compared to the rest of Canada and with a fair Welcome Tax (that acts as a Land Transfer Tax), it is safe to budget 2-4% of the final sale price to closing costs. In cases where you buy a brand new property, you will have to pay GST and QST, which can raise your closing costs to as high as 17-19% (not taking into account the rebates).
Want to learn more about mortgages? Head to our guide here.