Montreal 'Welcome Tax' Faces Class Action Lawsuit

In-Depth Analysis

The heart of the issue lies in how these cities use property assessment values to calculate taxes. Property values are reassessed every three years. For annual municipal taxes, many cities phase in the increased value over the three-year period. However, the lawsuit alleges that for property transfer taxes, the cities use the full assessed value from the first year, without phasing it in. This means new property owners are potentially paying transfer taxes on the future value of their property, rather than its current value at the time of purchase. The lawsuit seeks to rectify this discrepancy and ensure that property transfer taxes are calculated fairly. A similar case in April 2025 saw the court rule in favor of the homebuyers, who argued their taxes should be calculated on the adjusted taxable value and not the full value. Montreal was ordered to pay the plaintiffs $5600.

Read source article

FAQ

What are 'welcome taxes'?

'Welcome taxes' are property transfer taxes imposed on new buyers when a property is sold.

Which cities are affected by the lawsuit?

Montreal, Laval, Longueuil, and Brossard are specifically named in the class-action lawsuit.

What is the basis of the lawsuit's claim?

The lawsuit claims that these cities are calculating property transfer taxes on a different, higher basis than they use for annual municipal taxes, leading to overcharges.

Takeaways

If you purchased property in Montreal, Laval, Longueuil, or Brossard, you might have been overcharged on your property transfer taxes.
The lawsuit is automatically inclusive, meaning you don't need to register to be included if you've experienced the same issue.
The outcome of the lawsuit could impact how property transfer taxes are calculated in these cities going forward.

Discussion

Do you think these 'welcome tax' calculations are fair? Share your thoughts in the comments below!

Share this article with others who need to stay ahead of this trend!

Sources

Grand Montréal | Une action collective s’attaque à certaines « taxes de bienvenue » Plusieurs villes perçoivent des «taxes de bienvenue» trop élevées Quoi faire cette fin de semaine à Montréal? 7, 8 et 9 novembre

Disclaimer

This article was compiled by Yanuki using publicly available data and trending information. The content may summarize or reference third-party sources that have not been independently verified. While we aim to provide timely and accurate insights, the information presented may be incomplete or outdated.

All content is provided for general informational purposes only and does not constitute financial, legal, or professional advice. Yanuki makes no representations or warranties regarding the reliability or completeness of the information.

This article may include links to external sources for further context. These links are provided for convenience only and do not imply endorsement.

Always do your own research (DYOR) before making any decisions based on the information presented.