When buying property in Quebec, there are several things to consider. Although the procedure may be intimidating, the following article provides a step-by-step tutorial on acquiring Quebec real estate. Furthermore, various parts of the publication detail different sorts of land and agricultural investment issues.
1. Ensure buying land in Quebec is right for you
Although buying land in rural Quebec can sound like a dream, in reality, it takes lots of hard work. Don't forget that buying land is a huge investment, and there are numerous risks connected with this type of purchase.
Unlike buying a property in Montreal, you will have to "do it all" on your own: from implementing utilities to building a house while complying with municipal regulations.
If you don't like the idea of doing everything yourself, or if you want someone else to manage your new land after investing in it, opting for a different type of purchase may be more suitable for you.
2. Understand zoning restrictions
It's also critical to verify that the property you're buying is zoned for your proposed home. In particular, municipalities will review the number of floors, architectural style, or even dwelling area before approving construction. The city or province may force you to demolish a building that breaches zoning regulations if you construct one that isn't legal.
This is especially important if you wish to build a container house or mini-home. Although they are very trendy and inexpensive, not many municipalities accept them. Always make sure to review zoning before buying a property so that you don't acquire land you can’t develop to your wishes.
3. Pre-qualify for a mortgage
Obtaining a mortgage for land comes with a set of unique challenges. Mainly, you will have to pay a down payment between 30%-50% of the property value with a higher interest rate. This higher down payment and interest rates are derived from your lender's higher risk over a typical urban property. However, properties closer to a city will pay a down payment towards the bottom range.
Those who can't obtain a land mortgage have alternative financing options. A HELOC is a great secondary option but requires ample home equity. Borrowers with a poor credit score and lack of assets may be required to work with a private lender to secure a plot of land.
4. Determine a lot to buy
After you've done all of your homework, you may look at different lots to see if there's one that meets your needs. Although it's usually a good idea to hire an experienced real estate agent when purchasing property in Quebec, there are a few primary considerations:
Location & Topography: You'll want to pick a neighbourhood where other residences match the value of the home you want to build. Also, it's essential to consider the "topography" of a property. Properties on mountains with no access roads will be the most difficult to develop and will have a significantly higher cost.
Utility, Electrical & Internet Access: Some lots are connected to local utilities, while others are not. If you're buying land without access, you'll have to consider additional expenses to connect them. They will provide you with free access if you are less than 100 meters from a Hydro-Québec connection. However, properties beyond 100 meters will need to pay $83 per meter of extra connection distance. This expense is on top of deforestation costs.
Municipal Services: You must also ensure that the city's snow removal and garbage container collection work year-round. In some cases, garbage trucks will only travel in the summer months, leaving residents to dispose of their waste at the end of a road. If you plan to retire in your house, it could be a burden to shovel show in the winter months.
Environmental Damage: The last thing you want to waste money on is a costly environmental clean-up. Make sure to inquire about the property's history before purchasing it. Additionally, an onsite ecological assessment might be worthwhile.
Easements: An easement is a right granted by law. It gives someone the right to use someone else's property for a specific purpose. For example, if there is Hydro-Québec equipment close to the property, nothing can be built nearby. Properties by a lake may also have a right-of-way agreement that prevents you from blocking someone’s passage.
You've finally discovered the site of your dreams to build your house. You've compared costs, reviewed zoning and qualified for a mortgage. However, did you consider additional environmental hazards?
You can find clay soils throughout Quebec in the St. Lawrence Valley, the Ottawa Valley, and the Saguenay-Lac-Saint-Jean region. When clay soil becomes too dry, it can collapse underneath your property. Although it's not prohibited to build a house on clay soil, there are certain precautions you must follow.
Building a property on a wetland also poses challenges. Many land buyers prefer property close to water, but this comes with the risk of flooding. Additionally, erosion is a common occurrence that causes you to lose land each year. Quebec also has specific regulations that prohibit building on land that borders on a riverbank.
Roughly 60 tornadoes happen in Canada each year. However, the risk is lower for Quebec residents, where tornadoes are typically less powerful. Quebec can still experience small tornadoes in the province’s southern region in June and July. Aside from naturally avoiding areas at risk of tornadoes, there is little to minimize the danger.
Over 7,000 forest fires happen in Canada each year. It is once again nearly impossible to avoid this danger, except for living far from forests (which land buyers may not like). Homes located in a forest are especially vulnerable as climate change increases the risk of fires. If you plan on using this home seasonally, then you may consider Canadian home insurance.
Canadians experience, on average, four moderate-tier (higher than 4.0 magnitude) earthquakes each year. There is a 5% to 15% probability of western Quebec receiving a 7.1 magnitude earthquake within 50 years. Although inland earthquakes tend to have a minimal impact, they can still cause home destruction, fires, and floods.
Radon gas is inhaled through the air and can get trapped in homes. This lethal gas has no smell, taste or colour, which makes it difficult to detect. Although the risk is low for Quebec, certified companies can conduct radon testing on your land before buying.
This is untouched land that has never been developed. Water and power will not be available, and no buildings will be on the site. There could also be no access by road.
Vacant land has had at least part of its electrical, water, sewage, road services, or other infrastructure put in place. Vacant land is also privately owned.
Crown land, otherwise known as public land, is owned by the government. This land is possible to lease and occasionally buy and accounts for roughly 90% of land in Quebec. There are three ways to acquire crown land in Quebec:
1. Random draw: Each fall, the gouvernement du Québec conducts a draw where winners become eligible to lease a lot. The lots are typically 4,000-square-meters and are generally wooded, waterfront, and accessible by road. To take part in the annual draw, you can apply on the Sépaq website
2. Acquiring an existing lease: Purchasing a current lease is the most straightforward approach to getting a vacation lot on public land. However, it can be challenging to find a seller as there is no governmental website. Upon finding a lease for sale, you must apply for a lease transfer. There are additional transfer rules that you can find on the Quebec government website.
3. Application to lease or purchase: If you find public land that has not been leased yet, you can apply to lease or purchase it. This is known as a first-applicant lease. However, the gouvernement du Québec prefers to rent public property rather than sell it. Although under specific criteria, they may sell government land for private usage.
After obtaining a crown land lease, you receive specific rights for your lot. In general, you can develop a residence that complies with the conditions of your lease.
Additionally, you can obtain financing to construct your property. You have full ownership of the building if you build a property, but the gouvernement du Québec owns the land. This is known as a leasehold agreement.
How do I purchase a residence on public land (crown land)?
When you purchase a residence on public land, you must also apply for a lease transfer. There are additional costs as a result of this transaction. If the seller is in non-compliance with the government, then they can't transfer the lease. The seller must complete any required remedial action with the gouvernement du Québec before the transaction can be achieved.
How much does it cost to lease public land (crown land)?
For personal use, there are two scenarios; leasing land for a primary residence or a vacation home. Those leasing public land for a primary residence must pay 6% of the lot's property value in rent each year. However, those leasing land for a seasonal home only need to pay 5% of the market value each year.
When are the draws for new leases on public land?
The gouvernement du Québec runs a random draw each year in September. If you win, you can rent or purchase a piece of crown land.
What is crown land (public land)?
Crown land, otherwise known as public land, is owned by the government. This land is possible to lease and occasionally buy and accounts for roughly 90% of land in Quebec.
Is it better to buy raw land or vacant land?
Raw land is the most affordable, but it also requires the most effort. If municipal services are not available, you'll have to connect utilities and services or construct them yourself. Vacant ground may be more expensive than raw land, but it's easier to obtain financing for and develop.