{"id":11566,"date":"2026-07-22T09:20:21","date_gmt":"2026-07-22T13:20:21","guid":{"rendered":"https:\/\/spiegelryan.com\/?p=11566"},"modified":"2026-07-22T09:33:39","modified_gmt":"2026-07-22T13:33:39","slug":"long-term-commercial-leases-in-quebec-developments-concerning-land-transfer-duties","status":"publish","type":"post","link":"https:\/\/spiegelryan.com\/en\/2026\/07\/22\/long-term-commercial-leases-in-quebec-developments-concerning-land-transfer-duties\/","title":{"rendered":"Long-term commercial leases in Quebec: Developments concerning land transfer duties"},"content":{"rendered":"<p class=\"x_MsoNormal\" data-olk-copy-source=\"MessageBody\">In assisting commercial landlords and tenants, it appears to me that the top story in 2026 is developments concerning duties on the transfer of immovables (also known as \u201cland transfer duties\u201d, and perhaps best known as \u201cmutations tax\u201d), as they relate to long-term commercial leases.\u00a0 A lot of details on this are in my article on this issue\u00a0at <a href=\"https:\/\/spiegelryan.com\/content\/uploads\/2026\/07\/Long-term-commercial-leases-in-Quebec.pdf\">this link<\/a>\u00a0that was originally published on June 30, 2026\u00a0in\u00a0<i>Law360 Canada<\/i>, an online legal publication with national reach that is published by LexisNexis Canada Inc.<\/p>\n<p class=\"x_MsoNormal\">In this context, a long-term commercial lease has the definition found in Quebec\u2019s\u00a0<i>Act respecting duties on transfers of immovables\u00a0<\/i>(also known as the<i>\u00a0Mutations Tax Act<\/i>), namely is it a \u201ccontract of lease of a property with a term exceeding 40 years, including extensions or renewals.\u201d\u00a0 In 2026, we have seen the issue of mutations tax come up with regard to\u00a0long-term commercial leases, and\u00a0knowing that this issue is arising forewarns commercial landlord and tenants, so that they can try to be forearmed. We sometimes refer to these leases as \u201c40 Year Leases\u201d in this article.<\/p>\n<p class=\"x_MsoNormal\">Firstly, note that such long-term commercial leases are relatively common, for example they are often held by successful small businesses or institutional-type tenants that have been in a particular location for a while.<\/p>\n<p class=\"x_MsoNormal\">In the past, mutations tax came up for leases when a tenant would register the lease at the land registry office to block a possible new owner of the property from terminating the lease on statutory notice (of 6 months, that can be sent once 12 months passes after a new owner takes title to the property).\u00a0 (See this at article 1887 of the\u00a0<i>Civil Code of Quebec<\/i>.)\u00a0 Upon registration of the lease, the land register typically obliged the tenant to declare mutations tax at the regular rate applying to a sale of the property, but\u00a0reduced to reflect the relative area occupied by the tenant in comparison with the entire property.<\/p>\n<p class=\"x_MsoNormal\">All of a sudden in 2026, the City of Montreal finance department is telling those who inquire that the amount of the tenant\u2019s mutations tax in such a situation is much higher, with the property value upon which the mutations tax is calculated being in fact equal to past and future rent payable under the lease, which is much larger usually than the abovementioned relative area formula that the City of Montreal has told us that they used to use.\u00a0 To our knowledge, there is no jurisprudence backing up the city\u2019s apparent new position.<\/p>\n<p class=\"x_MsoNormal\">A second issue arising in 2026 is that some commercial landlords are starting to themselves raise the mutations tax issue with their tenants whose leases have or will approach the 40 year\u00a0mark.\u00a0\u00a0 These landlords have been concerned that since unregistered transfers of ownership have been subject to mutations tax since 2016, there might be logic in the mutations tax also applying to unregistered long-term leases.\u00a0 (We are not aware of any jurisprudence on the issue.)\u00a0 These landlords are apparently concerned that the city arguably has a lien (a legal hypothec) against the property arising by law for unpaid mutations tax, even though the tenant under the long-term lease is not the owner of the property.<\/p>\n<p class=\"x_MsoNormal\">Questions on these issues have therefore arisen with often no clear answer: Are unregistered 40-Year Leases subject to mutations tax?\u00a0 How does one calculate mutations tax for a lease?\u00a0 When does one conclude that a 40 Year-Lease exists, is it a soon as an original lease or an extension or renewal is signed that provides for the potential of a total present or future term of greater than 40 years?\u00a0 For unregistered leases, when calculating the 40 years, does one include or not the period prior to unregistered real estate sales clearly becoming subject to mutations tax back in 2016?\u00a0 What is a new lease (of presumably less than 40 years) as compared to an older 40 Year Lease?\u00a0 If a related party tenant is introduced in a new lease, does that risk anti-avoidance penalties under the mutations tax legislation (there is no material case law under the anti-avoidance provision relating to this legislation).\u00a0 Are commercial landlords justified in for example asking for indemnities in relation to possible mutations tax from their tenants under 40-Year Leases, and should liability under such indemnities be divided among the landlord and tenant?<\/p>\n<p class=\"x_MsoNormal\">Also interesting is the type of procedure that must be used to pay mutations tax under a 40 Year\u00a0Lease that has already progressed, for the presents and future, beyond 40 years.\u00a0 Arguably late declarations of an unregistered 40 Year Lease of mutations tax relating to the lease, must be made to Revenu\u00a0Quebec under the voluntary disclosure program as described in Revenu\u00a0Quebec\u2019s new voluntary disclosure Interpretation Bulletin of March 31, 2026 (ADM. 4\/R9).<\/p>\n<p class=\"x_MsoNormal\">We look forward to assisting commercial landlords and tenants in these matters that are newly arising in relation to long-term commercial leases. \u00a0Please do not hesitate to contact me with any questions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In assisting commercial landlords and tenants, it appears to me that the top story in 2026 is developments concerning duties on the transfer of immovables (also known as \u201cland transfer duties\u201d, and perhaps best known as \u201cmutations tax\u201d), as they relate to long-term commercial leases.\u00a0 A lot of details on this are in my article [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,40,21],"tags":[],"class_list":["post-11566","post","type-post","status-publish","format-standard","hentry","category-business-law","category-litigation-en","category-real-estate-law"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Long-term commercial leases in Quebec: Developments concerning land transfer duties - Spiegel Ryan<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/spiegelryan.com\/en\/2026\/07\/22\/long-term-commercial-leases-in-quebec-developments-concerning-land-transfer-duties\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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