For the benefit of BOMA Quebec members in Greater Montreal, here is a summary of the terms and conditions of the regulation regarding the transport tax for the Réseau express métropolitain (REM - electric train network) as outlined in the Loi concernant le Réseau électrique métropolitain .
- Zones subject to such a tax, i.e. the locations of each REM station or terminus (see sketch of stations in Appendix);
- The transportation tax will apply to buildings located entirely or partially within a zone linked to mass transit services within a radius of 1 kilometer of each station or terminus;
- For zones near the Édouard Montpetit, Gare Centrale and McGill stations, the radius is within 500 metres of each station or terminus.
For more information, consult Appendices A and B of ministerial order No. 2018-01 of April 4, 2018, no. 14, page 2136, published under the title Redevance de transport à l’égard du Réseau express métropolitain on the website of the Gazette officielle du Québec (see adjacent link) to determine whether a lot number is in one or more of the target zones.
As of May 1, 2018, local municipalities will be obliged to insist on a permit for construction work subject to the REM transportation tax, whereas currently such work does not require a permit. Municipalities are also required to collect, for the Autorité régionale de transport métropolitain, the applicable transportation tax depending on criteria described below.
The person who must pay the tax is the owner of a building under construction in a zone affected by the legislation. The term "owner" is one of the following:
- The person who owns the title to the building (right of ownership) ;
- The person who has a long-term lease to the building;
- The person who has usufructuary rights to the building, i.e. the right to use and enjoy the property of another;
- The person who has a superficiary right of ownership to the building.
Not subject to the legislation are:
- Public entities and government institutions;
- Daycare centres (CPE);
- Non-profit organizations or solidarity cooperatives (multi-stakeholder co-ops) as defined in the Loi sur la Société d’habitation du Québec;
- Other government agencies not included in points 1 and 2;
- Community action organizations, according to specific criteria;
- Any other person designated by the government.
CONSTRUCTION WORK SUBJECT TO THE TAX
- Buildings under construction ;
- Reconstruction of a building (except for the surface area) due to property damage caused by fire, flood, accident, etc. with the previous 24 months;
- Increasing the floor area of a building;
- Renovating a building due to a change in use (even partial), such that the building changes from one to another of the following eight categories:
- Restaurant, retail, entertainment or personal services business;
- Business or professional services office;
- Business offering accommodation (hotel, inn, etc.) or meeting rooms;
- Industry, wholesale businesses, para-industrial services and automobile services;
- Research and development and data centres;
Questions regarding applications for a specific permit must be addressed to the municipal agencies responsible for analyzing and issuing permits.
Construction work subject to the tax by the municipality at the time the permit is issued is work valued at $750,000 or more (excluding taxes) for an area of 186 square metres or more. That amount will be indexed every year on January 1. The result of that indexation will be published in the Gazette officielle du Québec.
The tax rate is $107.64 per square metre.
Legislation governing the light rail network calls for progressive application of the tax, as follows:
until December 31, 2018
50% of the tax rate of $107.64 /m2
from January 1, 2019 to December 31, 2019
65% of the tax rate of $107.64 $/m2
from January 1, 2020 to December 31, 2020
80% of the tax rate of $107.64 $/m2
For the purpose of determining the tax, the floor area taken into account is equal to the sum of the floor area for each floor under construction or renovation, including the mezzanine and the basement. The floor area is measured from the external surface of the outside walls.
All of the following expenses (excluding taxes) will be taken into account:
- Purchasing and installing materials and equipment integrated into the building, including costs related to:
- The architecture;
- The structure;
- Mechanical systems;
- Excavation and earth moving costs.
Not included are purchase and installation of equipment used for industrial procedures or industrial production.
- The tax will be calculated and is payable once the permit is issued, and must be paid in full by bank draft or money order at that time;
- The tax is to be paid by the owner and is collected by a local municipality on behalf of the Autorité régionale de transport métropolitain;
- When work is done without a permit, the tax remains payable because of the fact that the work is subject to the tax.
- Gazette officielle du Québec of April 4, 2018, ministerial order number 2018-04
- Loi sur l’Autorité régionale de transport métropolitain
- Loi concernant le Réseau électrique métropolitain