Ontario Non-Resident Speculation Tax: Who Pays and Refunds

If you are buying a home in Ontario and are not a citizen or permanent resident, you may face an extra provincial tax. It can be large, so it is worth understanding before you make an offer.

This article explains who pays, the main exemptions, and how the permanent resident rebate works. It is general information, and a lawyer can apply it to your situation.

What the tax is and who pays it

The Non-Resident Speculation Tax (NRST) has been 25% since October 25, 2022. It applies to residential property anywhere in Ontario bought by a foreign national, foreign corporation or taxable trustee.

A foreign national is an individual who is not a Canadian citizen or permanent resident. Notice that this differs from the federal foreign buyer ban, which also treats a person registered as an Indian as a Canadian. The two rules are separate, so you must check both.

Exemptions

• Ontario Immigrant Nominee Program nominees: a foreign national nominated under the OINP at the time of purchase is exempt if they have applied, or certify they will apply, for permanent residence before the nominee certificate expires.
• Protected persons under s. 95 of the Immigration and Refugee Protection Act.
• A foreign national who is the spouse of a Canadian citizen, permanent resident, nominee or protected person, as long as each spouse is a named transferee.

For the nominee exemption, every transferee must certify they will occupy the property as their principal residence within 60 days after registration. The same 60-day requirement applies to both spouses under the spousal exemption.

Whether an exemption fits often turns on small details, such as who is named on the transfer and what status each buyer holds on the purchase date. It is worth confirming these details with a lawyer before you sign.

The permanent resident rebate

If you paid the tax, you may be able to get it rebated. A foreign national qualifies if all of these are met:

• They become a permanent resident within four years of the purchase.
• They hold the property alone or only with their spouse.
• They occupy it as a principal residence starting within 60 days after registration.

The application must be received within 180 days of becoming a permanent resident. Rely on Ontario's own guidance for this deadline and write the date down as soon as your status changes.

Older rebates that are gone

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

Other rules that may apply to the same purchase

The NRST is not the only rule aimed at non-Canadian buyers. Under the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, s. 4(1), a non-Canadian may not purchase residential property, directly or indirectly, but there are exceptions, including for protected persons, certain work permit holders, certain international students, and acquisitions that result from death, divorce, separation or a gift. The ban started on January 1, 2023, and in February 2024 the federal government announced that it would be extended from January 1, 2025 to January 1, 2027.

• Residential property under the ban means buildings with three homes or fewer, plus parts of buildings such as a semi-detached house or a condominium unit. Larger multi-unit buildings are not covered.
• A non-Canadian who buys together with a spouse or common-law partner who is a Canadian citizen, registered Indian, permanent resident, protected person or qualifying temporary resident is exempt.
• Property located outside both a census agglomeration and a census metropolitan area is excluded from residential property under the ban.
• A person who breaks the ban can, on summary conviction, be fined up to $10,000, and the court may order the property sold on the Minister's application.

Newcomers should also know that for agreements signed after November 14, 2016, Ontario's first-time buyer land transfer tax refund is limited to Canadian citizens and permanent residents. A buyer who is neither at closing has 18 months after registration to become one and then apply. Whether the federal ban is still in force on your closing date is worth confirming with a lawyer.

What to do next

• Confirm whether you are a foreign national under Ontario's definition, and whether any other buyer or spouse is.
• Check whether an exemption fits before you sign, since it may depend on being a named transferee or on a nomination in place at purchase.
• If you rely on the nominee exemption, the spousal exemption or the permanent resident rebate, plan to move in within 60 days after registration.
• Keep your permanent resident date and write down the 180-day rebate deadline.
• Have a lawyer review the agreement and closing adjustments so the tax is handled correctly.

Frequently asked questions