Do I have to pay Ontario's non-resident speculation tax as a foreign buyer?
Yes, if you are a foreign national, foreign corporation or taxable trustee buying covered land. Ontario's Non-Resident Speculation Tax (NRST) is 25%, effective October 25, 2022, applies across Ontario and is in addition to the general land transfer tax. It applies to foreign nationals, foreign corporations and taxable trustees who acquire land with one to six single-family residences, and since March 27, 2024 this includes condo parking and storage units.
If any transferee is a foreign entity or taxable trustee, NRST applies to the full value of the consideration, not just that person's share, and every transferee can be liable. Larger rental buildings and agricultural, commercial and industrial land are not covered. Exemptions exist for Ontario Immigrant Nominee Program nominees, protected persons, and foreign nationals buying with a qualifying spouse named as a transferee. Status must exist on closing day, co-owners must qualify, and all transferees must occupy the home within 60 days after registration. They do not apply if a taxable trustee is a transferee, and only to registered transfers.
If you become a permanent resident within four years after the conveyance is registered, you may be able to apply for a rebate. Whether an exemption or rebate fits depends on your status and the facts, so a lawyer can confirm.
Key takeaways
- Ontario's Non-Resident Speculation Tax is 25% and is charged in addition to the general land transfer tax.
- If any transferee is a foreign entity or taxable trustee, the tax applies to the full value of the consideration and every transferee can be liable.
- Becoming an Ontario Immigrant Nominee Program nominee after closing does not qualify you for the exemption retroactively.
- A refund of overpaid or improperly paid NRST must be applied for within four years of paying the tax.