Buying a plex in Québec: welcome tax, returns and financing

The welcome tax, bracket by bracket

Property transfer duties (droits sur les mutations immobilières), the "welcome tax," are paid once, by the buyer, to the municipality. They are calculated by bracket on the tax base: the highest of the price paid, the price stated in the deed, and the value on the assessment roll multiplied by the year's comparative factor.

Québec's rates for 2026: 0.5% up to $62,900, 1% up to $315,000 and 1.5% above that. On the part of the base above $500,000, a municipality may set a higher rate, up to 3% (no cap in Montréal), and most large cities have done so.

For 2027, the first two thresholds rise to $64,400 and $322,600 (Gazette officielle du Québec, July 4, 2026); cities set their upper brackets in their December budgets.

Payment and exemptions

Nothing is paid at the notary's: the municipality sends a bill a few weeks to a few months after the sale, and the duties are payable from the 31st day after it is sent. Québec City allows three instalments, Sherbrooke four.

Transfers between spouses, in the direct line (parents, children, grandparents, grandchildren) or to a corporation in which you hold at least 90% (subject to a 24-month holding condition) are exempt; a purchase between siblings is not. When an exemption applies, several cities bill a substitute duty (droit supplétif) of up to $200.

First purchase: a tax credit, not an exemption

The law has no exemption for first-time buyers. Instead, Québec's Ministère des Finances announced a refundable home ownership tax credit in its Information Bulletin 2026-2 of April 17, 2026:

• Amount: 100% of the first $5,000 of duties and 25% of the next $3,500, for a maximum of $5,875, reduced by 2.35% of the tax base above $750,000 (zero at $1,000,000).
• Conditions: a home acquired after December 31, 2025, which will become your principal residence within the year, without having owned and lived in a home since January 1 of the fourth preceding year. The bulletin expressly includes duplexes and triplexes.
• Co-buyers: one credit, to be shared. An advance payment can be requested by December 1 if the tax base is $1,000,000 or less and the credit is over $1,000.

Example: for the $900,000 Montréal triplex, the credit would be $5,875 − (2.35% × $150,000), or $2,350.

The ratios: NOI, GRM, cap rate and DSCR

• Net operating income (NOI): rent, minus vacancy and operating expenses, before the mortgage and income tax.
• Gross rent multiplier (GRM): price ÷ annual gross income. Useful between plexes in the same neighbourhood, but blind to expenses.
• Capitalization rate (cap rate): NOI ÷ price, the building's return if bought with cash.
• Debt service coverage ratio (DSCR): NOI ÷ annual mortgage payments. Below 1, the rents don't cover the mortgage.
• Cash-on-cash return: cash flow ÷ (down payment + purchase costs), leaving out principal repaid, appreciation and income tax.

In the example in the plex return calculator (illustrative figures, not market averages), a $850,000 fourplex renting for $5,600 a month, with 3% vacancy and $19,700 in expenses, has an NOI of $45,484, a GRM of 12.6 and a cap rate of 5.35%. With 25% down and a loan at 4.5% over 30 years, the DSCR is 1.18 and cash flow is $6,912 a year.

Take expenses from the actual tax bills, not the assessment. School tax (in French) has a single rate across Québec: $0.07899 per $100 of value in 2026-2027, with the first $25,000 exempt.

Financing: semi-annual compounding

In Canada, a fixed mortgage rate is compounded semi-annually, not monthly (Interest Act, s. 6). In the example, $637,500 at 4.5% over 30 years costs $3,214.37 a month, versus $3,230.12 with monthly compounding: a spreadsheet that divides the rate by 12 overstates the payment.

For a rental building, lenders often require a DSCR of at least 1.20; below that, as in the example, a lender could require a larger down payment. Requirements vary from one lender to another: talk to your financial institution or mortgage broker.

For income tax, the transfer duties and the legal fees for the purchase are added to the building's cost: see Reporting rental income.

The assessment roll and the comparative factor

The property assessment roll (rôle d'évaluation foncière) is filed every three years. The Montréal agglomeration roll for 2026 to 2028, filed on September 10, 2025, reflects the market on July 1, 2024; residential buildings with 5 units or fewer went up 9.6% on average (City release, in French).

Roll value × comparative factor (facteur comparatif) = standardized value (valeur uniformisée), which is used for the welcome tax and school tax, among other things. In the second and third years of a roll, the factor is usually above 1, and the welcome tax base can then exceed the price paid. In 2026: 1.00 in Montréal, Lévis and Terrebonne; 1.02 in Gatineau; 1.03 in Laval; 1.06 in Longueuil; 1.08 in Québec City and Sherbrooke; 1.09 in Saguenay; 1.10 in Trois-Rivières.

Example: in Québec City, a building assessed at $900,000 and bought for $900,000 has a tax base of $972,000 ($900,000 × 1.08), or $18,520.50 in duties instead of $16,360.50.

Common questions

How much is the welcome tax on a $900,000 triplex in Montréal?

$13,349 in 2026, if the tax base is the price paid. In Laval, Sherbrooke or Lévis, the same purchase costs $17,610.50.

Does a duplex qualify for the first-time buyer credit?

Yes, according to the Ministère des Finances bulletin, if you will live in it as your principal residence and meet the other conditions. The credit has been announced; its passage into law is still to be confirmed.

What GRM should I look for in a plex?

No single number works everywhere: the GRM compares similar buildings in the same area and ignores expenses. Also look at the cap rate and the DSCR.

Is a purchase between siblings exempt from the welcome tax?

No. The exemption covers spouses and the direct line (parents, children, grandparents, grandchildren), not brothers and sisters.