In its March 17 budget the Quebec government brought in a series of measures reforming legislation governing transfer duties. Of particular interest is the introduction of the requirement to disclose off title transfers and the imposition of transfer duties on same. The legislation was drafted so to previously refer to registration as the trigger for taxation. The inclusion of off title transfers will now subject non registered transfers of “beneficial” interest (or the principal’s interest in the Property where title is held by a nominee) which accompanies a sale of shares in the registered title holder.
While the actual legislation has not yet been made available, the requirement is effective as of March 18, 2016 and will impact transactions in closing. Buyers may find their deposit at risk if the new requirements make the transaction uneconomic or they cannot obtain additional mortgage financing. These provisions should not generally speaking impact sales of shares or limited partnership units which are not accompanied by a transfer of real property.
Québec thus joins Ontario in capturing these off title transfers.
The budget also contemplates changes to brokerage regime including changes to the definition of brokerage and submitting mortgage brokerage to securities commission oversight instead of the current regulatory body.