The client
Newly-landed permanent-resident parents bought a $310,000 Matane home to house their adult child, in Canada on a study permit only and neither a borrower nor an owner on the file.
Purchase price
$310,000, Matane
10% down, insured
Occupant
Adult child, study permit only
Not a borrower or owner
Parents' combined income
$6,400/month
Relied on alone to qualify
Other debt
$210/mo car loan
The problem
The parents, first-time buyers by any definition, had researched Ontario's and BC's land transfer tax rebates before landing in Canada and priced their budget assuming Quebec's welcome tax (droits de mutation) worked the same way.
What research in other provinces didn't prepare them for
- ▸Ontario's own verified first-time-buyer refund covers up to $4,000, fully covering the LTT on homes up to $368,000
- ▸BC offers a full Property Transfer Tax exemption up to a verified $835,000 threshold for eligible first-time buyers
- ▸Quebec's welcome tax has no equivalent provincial first-time-buyer rebate at all -- the full amount is owed regardless of buyer history
The family had planned their closing-cost budget around a rebate that simply does not exist in this province.
The numbers
Qualifying on the parents' own income, with the studying child's occupancy treated as a non-borrower, non-owner arrangement, was the straightforward part of this file.
| Qualifying on the parents' income alone | Amount |
|---|---|
| Base mortgage (90% of purchase price) | $279,000 |
| CMHC premium (3.10% at 90% LTV) | +$8,649 |
| Total insured mortgage | $287,649 |
| Ratio check at the qualifying rate | Figure |
|---|---|
| Payment at the qualifying rate (6.95%), 25 years | $2,006/mo |
| GDS (payment + $260 tax + $95 heat) ÷ $6,400 income | 36.9% |
| TDS (GDS numerator + $210 car loan) ÷ $6,400 income | 40.2% |
36.9% and 40.2% sit comfortably inside CMHC's 39% GDS and 44% TDS maximums. Quebec's welcome tax on the $310,000 purchase came to $2,786 -- payable in full, with no rebate to apply for, a detail worth flagging early against the land transfer tax picture across Canada.
The solution
A courtier hypothécaire licensed under Quebec's Act respecting the distribution of financial products and services corrected the family's closing-cost budget before it became a closing-day surprise.
First, confirmed directly with a notary that no provincial first-time-buyer relief exists on Quebec's welcome tax. Nothing in the family's research from other provinces carried over.
Second, rebudgeted the full $2,786 welcome tax into the closing-cost estimate, rather than the reduced figure the parents had assumed.
Third, documented the studying child's occupancy as a non-borrower, non-owner arrangement, with no bearing on the parents' own income-based qualification.
The outcome
The purchase funded insured at 36.9% GDS and 40.2% TDS, with the full, unrebated $2,786 welcome tax paid at closing.
Both ratios sit comfortably inside CMHC's 39% GDS and 44% TDS maximums. Ontario's and BC's first-time-buyer transfer-tax relief simply has no Quebec counterpart -- this is a provincial policy difference, not an error to correct.
What to take from this file
- 01Quebec's welcome tax carries no provincial first-time-buyer rebate. A newcomer who has researched Ontario's or BC's relief will assume otherwise -- correct that assumption before it becomes a closing-day shortfall.
- 02A non-borrower, non-owner occupant -- like a studying adult child -- has no bearing on the actual borrowers' own qualification. Document the arrangement clearly so it is never mistaken for a rental or an undisclosed co-owner.
- 03First-time-buyer relief varies sharply by province, not just by amount but by whether it exists at all. Confirm the specific province's rule directly -- never assume portability from what a client learned elsewhere.
- 04Rebudget closing costs the moment a wrong assumption is caught, well before the notary's own trust ledger makes the shortfall unavoidable.
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.
- ▸Ontario.ca — Calculating Land Transfer Tax / Land Transfer Tax Refunds for First-Time Homebuyers — Ontario's marginal land transfer tax brackets and first-time-buyer refund.
Illustrative in this file — lender-specific, not rules:
- ▸4.95% contract rate — rates move daily; not a quote.
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.