Québec’s Municipal Affairs Minister, Geneviève Guilbault, is advocating for an expansion of the cessation of the “welcome double tax” through Bill 22. This legislation, initially introduced on March 25, aims to address the unnecessary financial burden on common-law partners during separation. Currently, when a couple separates, the party wishing to buy back the shared home over a year later faces a second property transfer tax. This “double welcome tax” is often significantly higher due to property value appreciation.
Proposed Changes to the “Welcome Double Tax”
In an interview, Guilbault mentioned that her bill has garnered positive feedback, with many suggesting further expansions. One significant amendment proposed is the removal of the “double welcome tax” on inherited properties.
Impact on Inherited Properties
Guilbault emphasized the financial strain experienced by individuals who inherit homes but are not intending to live in them. Many heirs are unaware they will need to pay this tax upon inheritance. “For cases of bereavement, we will eliminate all welcome taxes,” she stated, highlighting that immediate family members, including parents and spouses, are currently exempt from paying these taxes, unlike siblings.
Financial Implications for Municipalities
While Guilbault acknowledged that abolishing these taxes may lead to minor revenue losses for municipalities, she believes these impacts will be negligible. As of 2024, property transfer taxes constituted merely 3.9% of municipal revenues. She clarified that the aim is to strike a balance, providing relief to taxpayers without significantly disrupting municipal funding.
Legislative Timeline and Future Outlook
The legislative session is currently prorogued until May 5, putting the status of Bill 22 in jeopardy. There is no certainty whether the forthcoming Premier will prioritize this bill. Guilbault reported discussing the bill with CAQ leadership candidates Christine Fréchette and Bernard Drainville, both of whom expressed support for the proposal.
Next Steps
The Coalition Avenir Québec will elect its new leader, who will assume the role of Premier of Quebec, on April 12 during a congress in Drummondville. Guilbault has opted to maintain neutrality in the leadership race, aiming to ensure that the focus remains on taxpayer interests and the viability of future housing initiatives.
