Area of Law: Real Estate Law
Answer # 0450
Foreign buyers property taxRegion: Ontario Answer # 0450
Non-resident Speculation Tax (NRST)
In 2017, the Ontario Government introduced the Non-resident Speculation Tax (NRST). The NRST is a tax on the price of homes bought anywhere in Ontario purchased by people who aren’t citizens or permanent residents of Canada or by non-Canadian corporations. This new tax is in addition to Ontario’s land transfer tax payable.
Effective March 30, 2022 this tax is 20%.
Homes bought prior to March 30, 2022: The NRST is 15% and is applicable only to homes in the Golden Greater Horseshoe.
The geographical areas covered in the GGH include:
- City of Barrie
- County of Brant
- City of Brantford
- County of Dufferin
- Regional Municipality of Durham
- City of Guelph
- Haldimand County
- Regional Municipality of Halton
- City of Hamilton
- City of Kawartha Lakes
- Regional Municipality of Niagara
- County of Northumberland
- City of Orillia
- Regional Municipality of Peel
- City of Peterborough
- County of Peterborough
- County of Simcoe
- City of Toronto
- Regional Municipality of Waterloo
- County of Wellington, and
- Regional Municipality of York.
The NRST is not applied to the purchase of homes where the Agreement of purchase and sale was entered into on or before April 20, 2017.
Individuals and entities subject to the NRST
The NRST applies to foreign nationals, foreign entities and taxable trustees.
1. Foreign nationals: Individuals who are not Canadian citizens or permanent residents of Canada
2. Foreign corporations:
– Corporations incorporated outside Canada
– Corporations incorporated in Canada that are:
- controlled by a foreign national, or
- controlled by a corporation incorporated outside Canada; or
- corporations that if all the shares of the corporation which are owned by a foreign national or by a corporation incorporated outside Canada were owned by a particular person would be controlled within the meaning of section 256 of the Income Tax Act
3. Taxable trustees: A trust with at least one trustee that is a foreign entity, or if a beneficiary is a foreign entity.
Types of property covered by the NRST
The NRST only applies to the purchase of land with at least one and not more than six single family residences, such as:
- detached and semi-detached houses
- condominium units
- duplexes, triplexes, fourplexes, fiveplexes and sixplexes.
The NRST does not apply to the purchase of multi‑residential buildings with more than six units, or to agricultural, commercial or industrial land.
How is the tax calculated?
The NRST is calculated on the purchase price of the residential property. For example, if a single family detached home sold for $800,000, the NRST would be $120,000. If the purchase includes a residential property covered by the NRST as well as an excluded type of property, such agricultural land, the NRST only applies to the portion of the purchase price that relates to the residential property. For more information on the NRST, visit the Ontario Ministry of Finance website.
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