Property Taxes in Montreal and Laval: A Complete Explanation

Property taxes are not complicated, but they are misunderstood and consistently underestimated in buyers’ budgets. Year after year they are one of the heaviest costs of ownership, right after the mortgage.

Here is how they are calculated, what makes them rise, and the two mistakes that come up most often.

The municipal evaluation is not market value

Every property in Quebec carries a municipal evaluation, set by the municipality in a triennial evaluation roll. That evaluation reflects the market as it stood roughly eighteen months before the roll takes effect.

So it is not today’s market value. In a rising market it lags, sometimes by a lot: a property evaluated at $450,000 on the roll can trade at $600,000.

Your taxes are calculated on the municipal evaluation, not on the price you paid.

First common mistake: assuming the purchase changes the evaluation

This is the most widespread confusion, and it often comes from comparing with other provinces or with the United States.

In Quebec, buying a property does not trigger a reassessment. The municipal evaluation does not change because you just paid $600,000 for a property evaluated at $450,000. It will change at the next triennial roll, along with the whole neighbourhood.

So the tax bill the seller was paying is, give or take, the one you will pay the following year. Ask to see it: every seller has that document and it is your best source.

How the rate works

The municipality publishes a rate expressed in dollars per $100 of evaluation. The calculation:

(municipal evaluation / 100) x rate = annual taxes

Example with a rate of $1.00 per $100:

Rates vary by municipality and by property type. Montreal applies different rates to residential, commercial and six unit plus buildings. Laval, a unified city, applies its own schedule. A rate difference between two neighbouring cities can mean several hundred dollars a year on an identical property.

School tax, on top

The school service centre levies a separate annual tax, also calculated on the municipal evaluation. Since 2020 the rate has been uniform across Quebec, which ended the gaps between school boards.

The rate is much lower than the municipal one. For a typical residential property the annual bill is in the hundreds of dollars, not the thousands. It arrives separately, often at a different time of year, which surprises new owners.

The welcome tax, once

At purchase, the municipality collects a transfer duty known as the welcome tax. It is not annual, but it is heavy enough to plan for from the start.

It is calculated in brackets, and the thresholds are indexed each year:

• 0.5% on the first bracket up to $61,500
• 1.0% on the bracket from $61,500 to $307,800
• 1.5% on the portion above $307,800

Montreal adds its own brackets above $552,300, which makes its tax significantly higher on more valuable properties. Same thresholds, side by side:

The gap appears above $552,300 and widens from there. On a $900,000 property, buying in Montreal rather than Laval costs about $1,738 more in transfer duty.

The welcome tax calculator runs the exact figure for your city and price, with the thresholds in force.

What is the welcome tax actually calculated on?

A technical detail with real consequences. The tax base is the highest of these three amounts:

1. The price paid
2. The consideration stated in the deed
3. The municipal evaluation multiplied by that year’s comparative factor

The comparative factor adjusts the roll evaluation to bring it closer to the current market. In practice: in a market that has risen sharply since the roll was filed, the third figure sometimes exceeds the price paid, and the tax is then calculated on that higher amount. That is what explains the heavier than expected bills for buyers who got a good deal.

Second common mistake: forgetting the adjustment at the notary

The seller has usually already paid the municipal and school taxes for the current year. At signing, the notary prorates those amounts: you reimburse the seller for the portion of the year that is yours.

If you buy in early March and the seller paid the full year, you reimburse roughly ten months of taxes on signing day. On a $5,000 annual bill that is close to $4,170 out of your pocket, on top of everything else.

Many buyers discover that amount on the statement of disbursements a few days before signing. The closing costs calculator lets you place it with the other costs from the start.

When evaluations change, bills follow

Every three years the municipality files a new roll. After a cycle of sharp appreciation, evaluations sometimes jump dramatically.

A municipality normally adjusts its rate downward so it does not collect a proportional windfall. But the adjustment is an average: if your sector rose more than the city average, your bill goes up anyway, even with a reduced rate.

You can contest your evaluation if you believe it is wrong. The request for review is filed with the municipality within the deadlines set when the roll is deposited, and the file can then go to the Tribunal administratif du Québec. Successful contests almost always rest on comparable sales showing that the evaluation exceeds real value.

What to check before buying

Ask for the tax bill. Municipal and school, the last full year. That is the real number, not an estimate.

Check the date of the next roll. If a new roll takes effect next year and your sector has risen sharply, expect an increase.

Budget monthly, not annually. Taxes of $5,000 a year are $417 a month on top of your mortgage payment, insurance and condo fees if there are any. That total is what determines whether you are comfortable or stretched.

Plan for the adjustment and the welcome tax. Two cash amounts, a few months apart, arriving exactly when your bank account is at its lowest.

Want the precise calculation for a property you are considering? Reach out and I will run the exact numbers for that city.

Georges Matar

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

Contact Georges