Ontario Foreign Buyer Tax (NRST): Who Pays the 25%

If you are not yet a citizen or permanent resident, or you are buying with someone who is not, Ontario's foreign buyer tax may land on your purchase. It is often called the NRST, short for Non-Resident Speculation Tax, and it can add a large amount to your closing costs.

This article explains who the tax is aimed at, what kinds of property it covers, the main exemptions and the rebates that may follow. It is general information. Your own facts decide the outcome, so have a lawyer confirm your position before you commit to a purchase.

What the NRST is and where it applies

The NRST is 25%, effective October 25, 2022, and it applies across Ontario. It is charged in addition to the general land transfer tax, not instead of it.

It applies to land that contains one to six single-family residences. Since March 27, 2024, this includes condo parking and storage units. Larger rental buildings and agricultural, commercial and industrial land are not covered. Transitional rules can apply to agreements signed on or before October 24, 2022, so an older agreement needs a closer look.

Who is caught by the tax

The tax applies when foreign nationals, foreign corporations or taxable trustees acquire covered land. In plain words, it looks at who is taking title, not just who is paying the purchase price.

• A foreign national acquiring land with one to six single-family residences on their own.
• A foreign corporation acquiring covered land.
• A taxable trustee acquiring covered land on behalf of a trust.

This is where co-buying matters. If any transferee is a foreign entity or taxable trustee, the NRST applies to the full value of the consideration, not just that person's share, and every transferee can be liable. A Canadian citizen who buys with a foreign national relative or friend can therefore be exposed to tax on the whole price unless an exemption fits.

Exemptions that may apply

Several exemptions exist, and each comes with conditions. The comparison below gives the main ones in general terms.

For nominees and protected persons, co-owners must be citizens, permanent residents, nominees or protected persons, and all transferees must occupy the home within 60 days after registration. Becoming a nominee after closing does not qualify retroactively. For this purpose, spouse includes someone married or cohabiting continuously for at least three years, or in a relationship of some permanence as parents of a child.

The exemptions do not apply if a taxable trustee is a transferee, and they apply only to registered transfers.

Rebates and refunds after closing

If you become a permanent resident within four years after the conveyance is registered, you can apply for a rebate. The application must reach the Ministry of Finance within 180 days of becoming a permanent resident, and the date on the Permanent Resident Card is not the reference date. You must occupy the home as your principal residence from within 60 days after registration.

If two named transferees are spouses, only one of them must become a permanent resident for the rebate to apply. The rebate is not available if a taxable trustee is a transferee.

The transitional rebates for international students and for foreign nationals working in Ontario are no longer available. They applied only to agreements signed on or before March 29, 2022, and the application deadline was March 31, 2025.

A refund of overpaid or improperly paid NRST must be applied for within four years of paying the tax. Rebate and refund applications are made online through the Ministry of Finance services portal, or on Form 9996. Utility bills, property tax bills and home insurance are not accepted as proof of occupancy.

What to do next

• Write down the immigration status of every person who will be on title, and the date each status took effect.
• Check whether the property is one to six single-family residences or a condo parking or storage unit, since those are covered.
• Ask whether an exemption fits before you sign the agreement, because status often must exist on closing day.
• Plan to occupy the home within 60 days after registration if you may need an exemption or rebate.
• Keep proof of occupancy other than utility, property tax or insurance bills.
• Speak to a real estate lawyer about how the tax is handled on your closing.

Frequently asked questions