There is no “welcome tax” on luxury condos

Philip DeSira-Lessard
Press

Condos in many of the city’s most valuable buildings – often worth more than $ 1 million – have been sold and purchased without a contribution to the city’s coffers for decades. “No Welcome Tax” Many real estate listings are active at this time.

Plant management is asking Quebec to deal with this “unacceptable” situation by changing the law. “We firmly believe that everyone should make an equal contribution to the public treasury,” the mayor’s office said. Citi earns more than $ 150 million a year by changing taxes.

At the center of the problem: the collective ownership of the shares. Buildings organized in this way are wholly owned by a company, each occupant of which holds a certain number of shares, depending on the size of their condo. Each group of shares is associated with the exclusive pleasure of a condo.

When an apartment is sold, it is the shares that change hands. They are not closed Respect obligations on transfers of immovable property.

Many valuable buildings within the Golden Square Mile – the most expensive neighborhood in the entire province – are built this way. It has 450 home units, particularly in Port-Royal, Acadia, Linden & Chatto, Ru Sherbrook Ovest. The same is true of the chic residential towers in Westmount Square or the embassy courts on Avenue to Doctor-Benfield.

These buildings are great fortunes, judges, lawyers, famous artists and former ambassadors.

“A Variation”

Some joint-stock condominiums are structured in this way because the notion that they are separated condominiums arose while not yet in law, Mr.^e Denise-Claude Lamontagne, expert in notary law.

“It appeared in 1969. It’s unthinkable [avant], He related. This is probably birth. ”

After decades of vacation from transfer rights, the city of Montreal wants to close the gap. Tax losses are difficult to estimate, but they are significant in the City Hall budget.

“Against the backdrop of the affordable crisis that is raging in the metropolis and exacerbated by the epidemic, this situation varies as unacceptably,” Valerie Plante told the cabinet in an email statement.

“It goes without saying that this method of obtaining condominiums raises our eyebrows,” the report continues. At a time when the middle class is struggling to find housing, the city of Montreal strongly condemns this offer to some homeowners. This is against the principle of tax fairness and the Quebec government should amend the law. ”

In the tax position, shares in a joint-stock condominium are already considered real estate in some cases. For example, they are exempt from capital gains taxes at the time of sale and are attached to a condominium that served as a primary home.

Even the flaws

Real estate broker Tristan B. Bornet sells dozens of valuable properties a year in the city of Montreal, including several condominium apartments.

“It’s very specific to Ville-Marie, especially Golden Square Mile and Westmount, this type of condominium,” he said. It is based on the New York model. Park Avenue and 5 ^Th Avenue, around Central Park, is uniformly arranged. ”

In his opinion, the welcome tax deduction will have almost no effect on the decision of buyers who want to settle in these valuable buildings.

Conversely, this type of ownership can be “too scary” for some buyers, who prefer to have a clear title in an apartment rather than a certain amount of shares in a company that owns a building.

“The basic rule is, one square foot, [ce genre d’appartements] It sells for less than the decentralized co-ownership, ”said Bornett. Disadvantages to the buyer: Financing is more difficult than a transaction, where the property can be networked. In addition, all of these sales are made without legal guarantee. Bornett said.

Rather, it is the location and history of the building that motivates buyers to buy these buildings.