What is the Non-Resident Speculation Tax in Ontario and who pays it?

The Non-Resident Speculation Tax (NRST) is an Ontario provincial tax under the Land Transfer Tax Act that applies to purchases of certain residential properties by foreign nationals, foreign corporations, and taxable trustees who are not Canadian citizens or permanent residents. The tax is calculated on the purchase price of a qualifying property.

The NRST applies to residential properties with up to six single-family units located in Ontario. The rate and geographic scope have changed more than once since the tax was introduced in 2017 — confirm the current rate with a lawyer before closing, as it is material. Non-resident purchasers cannot benefit from first-time buyer LTT rebates while NRST applies.

There are some exemptions and rebates available — for example, foreign nationals who become permanent residents of Canada, or who are refugees or provincial nominees, may apply for a refund of the NRST after they qualify. Spouses of Canadian citizens or permanent residents may also be eligible for rebates. Given the significant cost involved, anyone affected should obtain legal advice before signing an agreement of purchase and sale, not after.