- The NRST (also called the foreign buyer tax) is a provincial tax charged on the purchase price of certain residential properties in Ontario when the buyer is a "foreign national" or…
- When the NRST was first introduced, it applied only to certain areas of the Greater Golden Horseshoe (a region roughly surrounding Toronto).
- The NRST rate has increased more than once since the tax was introduced, and it is important to verify the rate in effect on your closing date.
If you are not a Canadian citizen or permanent resident and you are thinking about buying residential property in Ontario, the Non-Resident Speculation Tax (NRST) is likely the first question your real estate lawyer will raise. It adds a significant percentage on top of the purchase price — and it applies on closing day, not later.
Ontario introduced the NRST to cool housing demand from foreign purchasers. The rules have shifted meaningfully since the tax launched, so understanding where things stand today — and confirming the current rate with your lawyer before you sign — is essential.
What Is the NRST?
The NRST (also called the foreign buyer tax) is a provincial tax charged on the purchase price of certain residential properties in Ontario when the buyer is a "foreign national" or "foreign corporation" as defined under Ontario's tax legislation. It is separate from and on top of Ontario's standard Land Transfer Tax (LTT) and, if you are buying in Toronto, the Toronto Municipal Land Transfer Tax as well.
The tax is collected on closing and remitted to the provincial government. Your real estate lawyer handles the calculation and remittance as part of the closing process.
Who Is a Foreign National for NRST Purposes?
A foreign national is generally someone who is neither a Canadian citizen nor a Canadian permanent resident. This includes:
- Temporary residents (such as work permit or study permit holders) — unless a specific exemption applies
- Foreign corporations — companies incorporated outside Canada or controlled by non-Canadians
- Trustees of certain trusts where a foreign national or foreign corporation has a beneficial interest
Canadian citizens and permanent residents do not pay the NRST, regardless of where they currently live.
Where Does the NRST Apply?
When the NRST was first introduced, it applied only to certain areas of the Greater Golden Horseshoe (a region roughly surrounding Toronto). That geographic limit was later removed. As of writing, the NRST applies province-wide across Ontario — meaning it covers residential purchases in Ottawa, Kingston, London, Sudbury, and everywhere else in the province, not just the Greater Toronto Area.
Confirm the current geographic scope with your lawyer, as the legislation has been amended before and could change again.
What Types of Property Are Covered?
The NRST applies to residential property — land containing at least one and not more than six single-family residences. Practically speaking, this captures:
- Detached, semi-detached, and townhomes
- Condominiums
- Vacant land zoned for residential use (in some circumstances)
Commercial, agricultural, or industrial property is generally outside the scope of the NRST, though mixed-use situations can be more complicated.
What Is the Current NRST Rate?
The NRST rate has increased more than once since the tax was introduced, and it is important to verify the rate in effect on your closing date. Do not rely on this article for the current percentage. Check with your real estate lawyer or confirm directly with the Ontario Ministry of Finance before you firm up your offer, because the rate on closing day is what matters.
As of writing, the rate is a meaningful surcharge — at levels that have been discussed publicly at 25% — but you must verify the exact current figure before relying on any number.
NRST Rebates and Exemptions
Ontario's NRST legislation includes several rebates that can reduce or eliminate the tax in specific circumstances. These rebates generally must be applied for; they are not automatic.
Newcomer Rebate (Permanent Residents and New Citizens)
If you become a Canadian permanent resident or citizen after you purchase the property, you may be eligible to apply for a rebate of the NRST, provided you meet the eligibility conditions (including a residency requirement at the property). The application has a deadline, so if your immigration status changes after closing, speak with a lawyer promptly.
Nominee Rebate
Foreign nationals who are nominees under a provincial or territorial nominee program — meaning they have been nominated for permanent residency — may qualify for a rebate if they occupy the property as their principal residence. Conditions apply and must be carefully met.
International Student Rebate
A qualifying international student who has been enrolled full-time at an approved Ontario post-secondary institution for a minimum period, and who occupies the purchased property as their principal residence, may be eligible for a rebate. Specific enrollment and occupancy conditions must be satisfied.
Spouse Exemption
Where a foreign national purchases property jointly with a Canadian citizen or permanent resident spouse, the NRST may not apply to the transaction. This exemption is subject to specific conditions — the relationship, ownership structure, and intended use of the property all matter. Your lawyer will need to review the details carefully.
Protected Persons
Individuals recognized as Convention refugees or protected persons in Canada are generally exempt from the NRST.
How NRST Is Handled on Closing
Your real estate lawyer will:
- Identify whether the NRST applies based on the buyer's status and the property type
- Calculate the amount owing based on the purchase price and current rate
- Collect the tax as part of the statement of adjustments
- Remit it to the province on closing
If a rebate may apply, your lawyer will also advise on how and when to apply, and what documentation you will need to keep.
NRST and Pre-Construction Condos
Foreign buyers who purchase pre-construction condos face an additional wrinkle: the NRST is calculated on the purchase price, but for a pre-construction unit the closing could be years away. The rate that applies is the rate on the closing date, not the date you signed the agreement of purchase and sale. If the rate changes before you close — as it has in the past — you could owe more than you planned. Build this uncertainty into your financial planning.
Frequently asked questions
Does the NRST apply if I already own property in Ontario?
Prior ownership does not exempt you from the NRST. What matters is your citizenship or immigration status at the time of the new purchase, the type of property, and whether any exemption applies to you.
Can I avoid the NRST by buying through a Canadian corporation?
Not automatically. A corporation controlled by a foreign national is itself a "foreign corporation" under the NRST rules and is subject to the tax. The ownership structure will be examined, and structuring purchases specifically to avoid the NRST can attract scrutiny.
If I get permanent residency after I buy, can I get my money back?
You may be eligible for the newcomer rebate if you become a permanent resident or citizen after closing and you meet the occupancy and application requirements. There is a deadline to apply — do not wait. Speak with a lawyer as soon as your status changes.
Is the NRST in addition to Land Transfer Tax?
Yes. The NRST is charged on top of Ontario's Land Transfer Tax and, if applicable, the Toronto Municipal Land Transfer Tax. These are separate obligations calculated independently.
This is a real estate question
Start a file online — flat, published fees, reviewed by a licensed Ontario lawyer before a dollar is owed.