Buying a duplex in Quebec, what should you know?
- coraliefortin076
- Sep 1
- 7 min read
Purchasing a duplex is an increasingly popular strategic decision in Quebec, particularly among first-time buyers and investors looking to build their real estate portfolio without investing in large rental complexes. This type of property offers an attractive balance between cost, versatility, and return. At Plan Maison Québec, we find that many clients who use our construction or renovation planning services are turning to this model for its flexibility and long-term profitability.
A duplex generally consists of two separate housing units, stacked or side by side. This allows the buyer to occupy one of the units as their primary residence, while renting out the other to generate rental income that contributes to the mortgage payment. It's a smart way to "have the tenant pay for part of your home," as many brokers like to say.
Calibrating your down payment correctly: rules specific to duplexes
When it comes to duplexes, the down payment becomes a key issue. It's essential to understand the rules to plan your purchase wisely. Generally, if you plan to live in one of the two units in the duplex, you could benefit from a down payment as low as 5%—provided the building's value doesn't exceed $500,000 and you take out mortgage loan insurance through the CMHC.
On the other hand, if you want to purchase the duplex solely as an income property, without living in it, financial institutions will require a minimum down payment of 20%. The same applies if you're buying a property that already generates significant rental income, or if you're an investor with other properties in your name. This is why Plan Maison Québec recommends that its clients meet with a financial advisor early in the project to understand their purchasing power and avoid unpleasant surprises.
The Plan Maison Québec team can also help you re-evaluate the space of an existing duplex to bring it into compliance with current standards or to optimize its market value in anticipation of refinancing or a future sale.
Evaluate potential profitability rigorously
Profitability is at the heart of any real estate project, and this is especially true when purchasing a duplex. To properly assess your return on investment, it's not enough to simply compare the rent to your monthly mortgage payment. You also need to consider a range of financial variables that many first-time buyers overlook: notary fees, municipal and school taxes, maintenance costs, insurance, management fees (if applicable), and potential vacancy periods.
At Plan Maison Québec, we encourage our clients to conduct a detailed analysis of the capitalization rate (cap rate) of the desired building. This is a key indicator in assessing the profitability of an income-producing property. It helps determine whether the purchase is a wise decision based on the net income generated by the property. The higher your capitalization rate, the more profitable the investment.
Also, don't forget to include an estimate of the cost of potential renovations or improvements in your calculations. Many buyers choose to purchase a duplex that needs partial or complete renovation. Our team at Plan Maison Québec can provide you with detailed plans tailored to your budget, while maximizing long-term returns.
Consider unexpected costs and plan for an emergency fund
Buying a duplex also means becoming the manager of a small rental property. This means you'll have to deal with everyday unforeseen events: a leaking water heater, a roof that needs replacing, windows that need replacing, or tenants who are late paying. These situations are an integral part of the reality of duplex owners.
An emergency fund is therefore essential. It is recommended to budget between 1% and 2% of the building's value per year for routine maintenance, in addition to a starting cushion equivalent to approximately 3% of the purchase price for any immediate repairs.
The Plan Maison Québec team helps its clients integrate these elements into their planning from the outset, adapting renovation plans according to priorities and the available budget.
This contingency component is particularly important if you are buying an older duplex, where normal wear and tear on materials and technical equipment requires more frequent repairs. Plan Maison Québec offers you comprehensive support to intelligently plan your work, whether for minor renovations or a complete overhaul of the structure.
Living in a duplex or buying a condominium: issues to consider
Owner-occupancy of a duplex is a popular option because it allows for more advantageous financing while maintaining direct control over the building's condition. However, it also involves co-living with tenants, a dynamic that can be tricky if not properly managed.
Some buyers choose to buy together, often with friends, a couple, or family. This approach allows for shared financial efforts, but it also comes with its share of shared responsibilities. In this case, it is essential to draft a clear, notarized joint ownership agreement that stipulates the rights and obligations of each party, the terms of resale, maintenance responsibilities, and so on. Plan Maison Québec, in collaboration with its legal partners, can assist you in this process, while helping you plan customized layouts to facilitate harmonious cohabitation.
In the case of a joint ownership purchase, the interior design can also be adapted to improve the privacy of each unit. Thanks to our custom plan design service, Plan Maison Québec can redesign spaces for optimal separation.
The tax and financial advantages of a duplex
One of the major attractions of duplexes in Quebec lies in the tax benefits they offer to owner-occupants or investors. Unlike a single-family home, a duplex generates taxable rental income, which opens the door to numerous tax deductions.
These can significantly reduce your annual tax burden while optimizing the net return on your investment.
As the owner of an income property, you can generally deduct a significant portion of the expenses related to the rented portion of the building. This includes:
Mortgage interest,
Municipal and school taxes,
Insurance,
Repair and maintenance costs,
Depreciation of building components (based on the rental portion),
Property management fees, if applicable,
A portion of utilities (if shared),
Professional fees (accounting, notary, etc.).
For example, if you occupy the ground floor of a duplex and rent out the upper floor, you may be eligible to deduct 50% of eligible costs from your tax return, depending on the size and use. This can represent thousands of dollars in savings per year, especially in the early years when maintenance or renovation costs are higher.
It is also possible, in some cases, to recover the sales tax (GST/QST) paid during major renovations or new construction when the building is intended for rental purposes. This recovery is subject to strict conditions, but it can be facilitated by professional plans and specifications like those provided by Plan Maison Québec, which allow you to present a clear and complete file to the tax authorities.
Another interesting tax advantage is the ability to defer or manage capital gains upon resale. If you lived in part of the duplex, you could benefit from a partial or total exemption from capital gains tax thanks to the principal residence exemption. Once again, good bookkeeping and a clear separation of spaces (personal occupancy vs. rental) are essential, and Plan Maison Québec can assist you with this planning from the design stage.
Finally, all these tax benefits are part of a long-term strategic vision. By investing in a well-designed, compliant, and optimized duplex, you not only increase your current income, but also the overall value of your real estate asset. This positions you favorably for future refinancing, profitable resale, or even access to other investment opportunities.
To fully benefit from these advantages, it is highly recommended that you work with a rental property accountant and a residential design professional who understands the tax requirements of mixed-use buildings. Plan Maison Québec offers this technical expertise from the start, ensuring that every square meter of your duplex maximizes your financial advantages—now and in the future.
Legal Aspects to Consider When Buying a Duplex
1 . Municipal regulations and permits
In Quebec, each municipality may have its own regulations regarding the construction, renovation, and use of duplexes. It is essential to check with your city for current standards regarding density, setbacks, parking, access, and environmental regulations. A mistake at this stage can be costly, especially if you plan to modify the structure or interior layout.
The Plan Maison Québec team is experienced in working in compliance with these local standards and will assist you in preparing plans that facilitate the obtaining of construction and renovation permits, thus minimizing the risk of rejection or delays.
2 . Leases and rental relationships
A duplex necessarily involves a landlord-tenant relationship. In Quebec, this relationship is governed by the Régie du logement, which oversees the signing of leases, rent increases, and the rights and responsibilities of each party.
It is important to fully understand your legal obligations, particularly regarding repairs, security, and respect for tenant privacy. In the event of a dispute, mediation is preferred, but knowledge of the rules is a key asset in avoiding complications.
If you are planning to renovate a duplex for rental, it may be wise to plan the work while taking into account regulations regarding accessibility, fire safety, and soundproofing. Here again, the personalized plans created by Plan Maison Québec are a valuable tool for reconciling comfort, legality, and rental attractiveness.
3 . The tax and legal implications of co-purchasing
When a duplex is purchased by several people (family, friends, partners), a clear legal framework must be established. A joint ownership contract or shareholders' agreement, drawn up by a notary, must define responsibilities, income management, exit arrangements, and the distribution of expenses. Without this, conflicts can quickly arise.
Plan Maison Québec often works with partner notaries and legal advisors who can advise you on these aspects, in addition to offering architectural solutions that facilitate shared living in the duplex.
Conclusion : Trust Plan Maison Québec to make your duplex buying project in Quebec a success
Buying a duplex in Quebec represents an exceptional opportunity to build a solid real estate portfolio while enjoying a quality of life tailored to your needs. However, this complex project requires careful financial, legal, and architectural preparation.
With Plan Maison Québec, you benefit from comprehensive and personalized support. We put our expertise in designing construction and renovation plans at the service of your project, helping you maximize the profitability, comfort, and compliance of your duplex. Our tailor-made solutions take into account your objectives, your budget, and the realities of the Quebec market.
Don’t wait any longer to make your real estate dream come true:
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