The client
A buyer purchased a $650,000 new-build condominium in Montreal at 15% down, on $12,000/month of combined household income.
Purchase price
$650,000, Montreal
New-build condominium, 15% down
Province's own welcome-tax schedule
$7,860
The figure the buyer's budget was built around
Portion above $500,000
$150,000
Subject to a municipality's own additional rate
Other debt
$230/mo car loan
The problem
The buyer's closing-cost budget was built entirely off Quebec's provincial welcome-tax schedule — the indexed brackets that apply the same way everywhere in the province. What that schedule doesn't show is that any municipality may set its own additional rate on the portion of a purchase above $500,000, up to an ordinary cap of 3% that binds most Quebec municipalities. Montreal specifically is the one municipality with the authority to set a rate even higher than that cap.
Two different numbers, easy to conflate
- ▸The province's own indexed brackets (0.5% / 1.0% / 1.5%) apply identically everywhere in Quebec, with no municipal input at all
- ▸Above $500,000, a municipality may layer its own additional rate on top — up to 3% for most municipalities
- ▸Montreal alone can set its own rate above that 3% ordinary cap, by its own current bylaw — a figure the province's schedule never shows
The buyer had confirmed the provincial brackets carefully. Nobody had checked what Montreal itself had actually adopted on the tier above $500,000.
The numbers
The province's own schedule alone understates what a Montreal purchase above $500,000 will actually owe once the city's own tier is added.
| Welcome tax on $650,000: province alone vs. minimum realistic total | Amount |
|---|---|
| Province's own indexed brackets | $7,860 |
| Ordinary 3% municipal-cap rate on the $150,000 above $500,000 | +$4,500 |
| Minimum realistic total (before Montreal's own bylaw rate is confirmed) | $12,360 |
| Qualifying the purchase | Figure |
|---|---|
| Total insured mortgage (incl. 2.80% CMHC premium) | $567,970 |
| Payment at the qualifying rate (6.90%), 25 years | $3,943/mo |
| Property tax | $360/mo |
| Heat (lender estimate) | $140/mo |
| Car loan | $230/mo |
| Total debt service | 38.9% |
37.0% GDS and 38.9% TDS both sit comfortably inside CMHC's maximums, in line with the volume residential construction investment data shows moving through new-build purchases each year. The ratios were never the obstacle on this file — confirming the actual welcome-tax bill was.
The solution
A courtier hypothécaire licensed under Quebec's Act respecting the distribution of financial products and services went straight to the source rather than relying on either the provincial schedule or the typical municipal cap.
First, confirmed with the notary that Montreal has its own additional rate above the ordinary 3% municipal cap, rather than assuming the cap that binds most other Quebec municipalities applies here too.
Second, requested Montreal's own currently-adopted rate directly, since it is set by the city's own bylaw and is not fixed at any province-wide figure.
Third, rebuilt the closing-cost budget around the confirmed municipal figure well before the final closing statement, rather than treating the $7,860 provincial-schedule number as the whole bill.
The outcome
The purchase funded insured at 37.0% GDS and 38.9% TDS, with the welcome tax confirmed against Montreal's own current bylaw rate before the final closing statement was issued, rather than against the province's base schedule alone.
What to take from this file
- 01Quebec's provincial welcome-tax brackets are not the whole bill above $500,000. A municipality may add its own rate on that portion, and most cap at 3% — but Montreal specifically does not have to.
- 02Montreal's own rate is set by its own bylaw, not the province's schedule. Confirm it directly with the notary rather than assuming either the base schedule or the typical cap applies.
- 03The ordinary 3% cap is a floor for budgeting, not Montreal's confirmed figure. Treat any pre-confirmation estimate as a minimum, not a final number.
- 04This is a new-build-specific budgeting risk, not a civil-law procedural one. It sits entirely in the welcome-tax calculation, separate from anything about the notarial act or the property's construction itself.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
- ▸Gouvernement du Québec — Droits sur les mutations immobilières — Quebec's transfer duties ('welcome tax') — 2026 indexed brackets.
Illustrative in this file — lender-specific, not rules:
- ▸4.90% contract rate — rates move daily; not a quote.
- ▸Montreal's own current municipal welcome-tax rate above $500,000 — set by the city's own bylaw and subject to change; the ordinary 3% cap used here is a floor for illustration, not Montreal's confirmed figure.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.