Should You Invest in Rental Property in Quebec?

In the third quarter of 2026, a plex of 2 to 5 units sold for a median of $890,000 in Laval and $902,500 on the Island of Montreal, according to Centris. Rented at CMHC average rents, does a triplex at that price pay its own mortgage? The calculation below answers with 2026 public data, the method of the Tribunal administratif du logement (Quebec’s rental board) and income tax. It is an example, not a promise of return.

Rental property in Quebec: what changed in 2026

Rent-setting changed methods. For a lease modification notice given since January 1, 2026, the Tribunal administratif du logement (TAL) applies the Regulation respecting the criteria for the fixing of rent, as amended by Order in Council 1455-2025.

More units are vacant. In the Montreal metropolitan area, CMHC measured a vacancy rate of 2.9% in October 2025, compared with 2.1% a year earlier, a second increase in a row that it attributes mainly to the drop in the number of non-permanent residents.

Plexes are selling less, with no drop in medians. In Q3 2026, Centris counts 65 plex sales in Laval (-20% year over year) and 614 on the island (-13%). Active listings rose 4% and 16% respectively, and median prices 2% and 3%.

Credit costs between 4% and 4.5%. In July 2026, the latest month published by the Bank of Canada, chartered banks were charging 4.49% on a new uninsured residential mortgage fixed for 5 years or more, and 4.05% if insured.

Plex prices and rents in Laval and Montreal: the data

Sources: Centris, third quarter of 2026; CMHC, Rental Market Report 2025, tables 1.1.1 and 1.3.2 of the Montreal workbook. CMHC rates Laval’s rate as “good” and does not consider its increase significant.

A plex median does not tell you how many rents it buys. It mixes duplexes, triplexes, fourplexes and five-unit buildings. Over four quarters, Centris puts it between $802,875 in Pont-Viau and $922,000 in Chomedey, among the neighbourhoods where it publishes one. The rest of the picture is in the Laval real estate market by sector.

The rent of a vacant unit is not the rent you are buying. In Laval, in October 2025, CMHC reports an average rent of $2,008 for a vacant two-bedroom, compared with $1,338 for an occupied two-bedroom. And article 1937 of the Code civil du Québec (Civil Code of Quebec) is clear: the sale of a building does not allow the new lessor to terminate the lease, which is continued. The buyer inherits the rents of the occupied units.

A median Laval plex, worked out line by line

The assumptions. A price of $890,000. Three two-bedroom units, all rented at $1,186, the CMHC rent for October 2025. An investor who does not live in the building puts down 20%, the minimum CMHC sets to insure the loan on a non-owner-occupied building of 2 to 4 units sold for less than $1,000,000. The example uses an uninsured loan at the same ratio, with no premium: $712,000 at 4.49%, compounded semi-annually, amortized over 25 years. Heating and electricity are paid by the tenants. Municipal assessment: the price divided by the comparative factor of 1.03 that Laval publishes for 2026, or $864,078. No official source publishes an insurance premium or a typical maintenance budget for a triplex: the $3,000 used for each are assumptions, to be replaced by a quote and by the inspection.

The municipal rate adds up Laval’s 2026 base rates: the general property tax ($0.4973) and the special taxes for water ($0.0111) and for the ARTM ($0.0825). The school tax applies to the standardized value, here $890,000, minus the $25,000 exemption in section 303 of the Education Act.

The verdict of the example. Net income, $27,975, is equal to about 3.1% of the price, less than the loan rate: every dollar borrowed costs more than the building brings in. Even with no interest at all, repaying $712,000 over 25 years would take $2,373 a month, more than the $2,331 of monthly net income. To break even, each rent would have to reach about $1,740.

Principal repaid is not an expense. In the first year, $15,889 of the payments goes to reducing the debt. Before any change in the building’s price, which no one can guarantee, the year’s balance therefore comes to about -$3,377.

The money to put together. In 2026, Laval levies transfer duties (the welcome tax) at 0.5% up to $62,900, 1% up to $315,000, 1.5% up to $500,000 and 3% above that: $17,310.50 on $890,000. With the $178,000 down payment, you need $195,310.50 before the notary and the inspection. Redo the payment with your own rate in the mortgage calculator.

Variation: you live in one of the units. CMHC then accepts a 10% down payment, or $89,000, for 3 or 4 units sold for less than $1,500,000. Its 3.10% premium adds $24,831 to the loan. At 4.05%, the insured rate for July 2026, the payment is $4,366. With two rents coming in, you are left with $3,181 a month to pay, of which $1,632 is principal on average in the first year: that is the cost of your own home, to compare with your current rent.

TAL rent-setting: what it changes in the calculation

The 2026 base: 3.1%. Section 3.1 of the regulation calculates it as the average of three annual changes in Quebec’s consumer price index. The TAL applies it to rents to be fixed for a period beginning between April 2, 2026 and April 1, 2027. In the example, 3.1% of $1,186 gives $36.77 a month per unit, or $1,324 a year: 7% of the $19,266 gap.

A tax increase passes through only above the base. Section 4 subtracts the base percentage from any increase in taxes or insurance. If the municipal tax bill rises 5%, only 1.9% of the monthly bill is added to the rents.

Major work is recovered over 20 years. The regulation grants 5% a year of the capital expenditure, allocated according to each unit’s share of the building’s revenue. A $30,000 roof adds $1,500 a year to the rents, $41.67 a month per unit in the example: 20 years to recover the bill, not counting interest. Section 13 deducts any public assistance received.

Nothing applies automatically. A tenant who does not refuse the increase within the month is deemed to have accepted it (article 1945). After a refusal, the landlord has one month to apply to the TAL, otherwise the lease is renewed on its previous conditions (article 1947). The TAL’s 2026 calculation tool redoes the exercise for a specific unit.

What income tax takes out of a rental return

Net rent is taxable. Federally, it is reported on form T776. The Canada Revenue Agency (CRA) lets you deduct interest on money borrowed to buy a rental property, but not the part of the payments that repays principal. In the example, if the $3,000 for maintenance is actually spent, $27,975 minus $31,352 of interest gives a loss of $3,377 in the first year. According to the CRA, a rental loss can be deducted from your other income if the expenses were incurred to earn income.

Depreciation does not help in a loss year. Most buildings acquired after 1987 are in Class 1, at 4%, land excluded. But capital cost allowance (CCA) can neither create nor increase a rental loss, the CRA specifies: no CCA in the example in the first year.

The bill comes at resale. The CCA you claimed can come back into your income as recapture. The gain is a capital gain, whose inclusion rate is generally one half according to the CRA’s 2025 guide. If you live in one of the plex’s units, the principal residence exemption covers only that part.

These rules are federal: have an accountant validate the Quebec treatment, the CCA and the form of ownership before you make an offer. The list of allowable expenses is in what deductions a homeowner can claim in Quebec.

Investing in rental property in Quebec: who it suits, and who it does not

The project can work if:

• you live in one unit: the down payment drops to 10% and the cost replaces your rent;
• you have about $195,000 in cash and a reserve to cover $19,266 a year;
• your horizon is long, since the example’s return comes from principal repaid;
• the leases show rents close to break-even, or the price is below the median;
• you have the time to handle notices, refusals and hearings.

It does not work if:

• you are counting on monthly income from the first year;
• your down payment is borrowed or your reserve does not exist;
• your calculation assumes raising the rents to the level of vacant units;
• you plan to resell quickly: the $17,310.50 in transfer duties is paid at purchase.

The cases where waiting costs less are in eight situations where you should not buy.

Frequently asked questions

Is buying a plex profitable in 2026? Not at the median price with average rents, in the example calculated here: it falls $1,606 a month short with a 20% down payment. The result depends on the price paid, the rents written in the leases and the down payment. No public data makes it possible to promise a gain in value that would close the gap.

What is the vacancy rate in Montreal in 2026? No 2026 rate has been published as of October 21, 2026. The most recent one, measured by CMHC in October 2025, is 2.9% for the metropolitan area and 2.1% in its buildings of 3 to 5 units.

How much can I raise my rents in 2026? No percentage is imposed on an increase the tenant accepts. If the tenant refuses and the matter goes to the TAL, the calculation starts from 3.1%, plus the excess of tax and insurance increases and 5% of capital expenditures.

Is it better to wait for rates to fall? This article makes no forecast. In the example, even an interest-free loan would not balance the cash flow.

To go further, read the income plex guide for a first purchase and the checks to run before buying a triplex in Laval.

Want to redo this calculation with the leases and tax bills of a specific plex? Write to me. Every line can be redone with the seller’s documents. Service in French, English and Arabic.

Georges Matar

Residential Real Estate Broker · RE/MAX DU CARTIER INC.

Contact Georges