Chelsea mulls raising 'welcome tax' CBC News

Chelsea, Que., is considering an increase to a tax new residents pay when they move in, but councillors remain divided on the issue.

The "welcome tax," as it's commonly known, is paid to local governments when buying real estate in Quebec. The amount differs from one municipality to another.

In Chelsea, new homeowners are required to pay between two and three per cent of their property's value to the municipality. Owners of property valued between $500,000 and $750,000 pay two per cent, properties worth $750,000 to $1 million pay 2.5 per cent, and those over $1 million pay three per cent.

A proposed bylaw would hike those rates in Chelsea to 2.5 per cent for properties valued between $500,000 and $750,000, and three per cent for anything valued higher.

The municipality expects to receive additional revenue totalling $180,000 by making this change.

Council split

Coun. Cybèle Wilson said the average cost of a home in Chelsea is $663,000, and said it would be unjust to raise the welcome tax on properties valued below that figure.

"I do not believe that people below the average should have to carry a heavier burden," Wilson said in French.

But Coun. Dominic Labrie, who proposed the change nine months ago, argued that if the municipality doesn't increase revenue this way, it will have to increase property tax instead.

Labrie also lamented that Chelsea has lost additional revenue it might have collected while council debates the matter.

Chelsea Mayor Pierre Guénard said he's taking a neutral stand.

"On the one hand, we are talking about accessibility for first-time buyers," he said in French. "On the other hand, there is certainly the element of the municipality's lack of revenue."

Councillors were scheduled to vote on the bylaw on Tuesday, but postponed their decision until September.