The QFREB and the APCHQ Request That the "Welcome Tax" be Abolished for All First-Time Buyers

The two organizations invite the Québec government to follow Ontario's lead regarding access to homeownership

MONTRÉAL, Nov. 16, 2016 /CNW Telbec/ - The Québec Federation of Real Estate Boards (QFREB) and the Association des professionnels de la construction et de l'habitation du Québec (APCHQ) are calling on the provincial government to draw inspiration from the tax measures designed to promote homeownership that were announced by the Ontario government on November 14.

The two organizations want the Québec government to follow the example of its Ontario counterpart and adopt measures that will allow first-time buyers to reduce their tax burden when buying a home. Starting on January 1, 2017, Ontarians who buy their first property will no longer have to pay the Ontario equivalent of the "welcome tax" on the first $368,000 of the home price. This represents a rebate of up to $4,000.

"The QFREB wants first-time buyers to be completely exempt from paying real estate transfer taxes, in addition to the exemptions that are already in place," said Paul Cardinal, Manager of the Market Analysis Department at the Québec Federation of Real Estate Boards. "Currently, the collection of transfer taxes is mandatory for all municipalities, although some cities such as Laval and Montréal have set up targeted programs to reimburse the "welcome tax", particularly to help young families," he explained.

"It is becoming increasingly difficult for young families to become homeowners. The six mortgage tightening measures imposed by the federal government in the past nine years have hit first-time buyers hard," said François-William Simard, Vice-President, Strategic Development and Communications at the APCHQ. "We are asking the government, as well as the municipalities, to implement concrete measures that would allow Québec to catch up on its homeownership rate, which sat at 61% compared to more than 70% in the other Canadian provinces, according to the 2011 census," he added. 

In addition to the abolition of transfer taxes for first-time buyers, the QFREB and the APCHQ propose that the taxation brackets for calculating transfer taxes be updated. Currently, transfer taxes are calculated based on the value of the property as follows:

Province of Québec, except the City of Montréal			City of Montréal
$0 – $50,000	0.5%		$0 – $50,000	0.5%
$50,001 – $250,000	1.0%		$50,001 – $250,000	1.0%
$250,001 or more	1.5%		$250,001 – $500,000	1.5%
			$500,001 – $1,000,000	2.0%
			$1,000,001 or more	2.5%

These brackets have not increased since 1992, even though residential property prices have almost tripled during the same period. For example, the buyer of a $100,000 property in 1992 had to pay $750 in transfer taxes. Today, this same property is now worth about $290,000, which translates into $2,850 in transfer taxes. The "welcome tax" has therefore been multiplied by 3.8, while property prices have multiplied by 2.9.

In the wake of the latest mortgage tightening measures announced on October 3, 2016, by the federal government, which will severely penalize first-time buyers in Québec, the QFREB and the APCHQ believe that the time is right to alleviate the burden on young families in Québec by abolishing transfer taxes for all first-time buyers.

Finally, both organizations welcome the Finance Minister's decision to include the QFREB's proposal in Bill 112, which was tabled yesterday. Thus, ex-spouses who are joint owners of a property will be exempt from paying transfer taxes if one of the spouses acquires the other spouse's share of the property within twelve months of the breakup. The QFREB and the APCHQ hope that their recommendation to abolish transfer taxes for all first-time buyers will also be incorporated into the Act Respecting Duties on Transfers of Immovables.

About the Québec Federation of Real Estate Boards

The Québec Federation of Real Estate Boards is a non-profit organization composed of Québec's 12 real estate boards and the close to 13,000 real estate brokers who are their members. Its mission is to support Québec's real estate boards in order to defend, protect and promote the interests of real estate brokers through the provision of services in the areas of professional practices, public affairs and market analysis. The QFREB is guided by an approach that is centred on collaboration and resource sharing.

About the APCHQ

Founded in 1961, the Association des professionnels de la construction et de l'habitation du Québec (APCHQ) is a private, non-profit organization that seeks to develop and enhance the professionalism of its 17,000 corporate members, which belong to 14 regional associations. Through its technical, legal, administrative and training services, and its government and public interventions, the APCHQ helps its members hone their skills and succeed in a highly competitive environment. As well, when the time comes to renew the construction industry's collective agreements, the ACPHQ negotiates on behalf of 14,500 employers in the residential sector.

SOURCE Québec Federation of Real Estate Boards

Jacynthe Alain, Assistant Manager, Communications and Public Relations, Québec Federation of Real Estate Boards (QFREB), 514-647-8249, [email protected]; Jean-Sébastien Lapointe, Advisor, Communications and Public Relations, Association des professionnels de la construction et de l'habitation du Québec (APCHQ), 514-771-5038, [email protected]