Non-resident Speculation Tax in Ontario

What is NRST?

Non-Resident Speculation Tax (NRST) is also known as the Foreign Home buyer’s Tax. As the name suggests, NRST is paid on homes bought by foreign entities.

When was NRST first introduced in Ontario?

NRST was introduced in 2017. It impacted properties in the Greater Horseshoe region of Ontario and the NRST rate was 15 percent of the home’s purchase price. There have been some amendments since then:

● For Homes bought on or after March 30, 2022: Tax rate increased from 15% to 20%.
Application of tax expanded to all homes in Ontario.
● Effective October 24, 2022, the province’s non-resident speculation tax rate further increased to 25% from 20%.

Why the need for NRST?

The housing market in Ontario has seen rapidly increasing prices in the past few years. Buying a house in Ontario may never be a reality for many individuals residing in the province. The housing market has not been able to keep up with the demands of the increasing population. The Ontario government is imposing NRST due to these concerns. NRST will deter foreign buyers who are not resident in Ontario, from buying houses just for speculation purposes.

Who has to pay NRST?

● Foreign Nationals- Individuals who are not Canadian citizens or permanent residents
● Foreign Corporations- Not incorporated in Canada, or incorporated in Canada but have no shares listed on a Canadian stock exchange, and are subject to de facto control, as determined for income tax purposes, by one or more foreign nationals or corporations not incorporated in Canada.

Are there any Exemptions?

NRST Exemptions can apply based on various conditions like type of property purchased to status of the foreign individual. Some of the situations where an individual is exempt from NRST are:

● The individual is a Nominee under the Ontario Immigrant Nominee program. They must apply or certify to become a permanent resident of Canada before the expiry date of their nominee certificate.
● A protected person under the Immigration and Refugee Protection Act
● spouse who is a Canadian citizen, Canadian permanent resident, nominee or refugee if the foreign national jointly purchases residential property with that spouse (but not jointly with any other person).

Can I get a Rebate?

After March 29, 2022, only the Permanent Resident rebate will be available. To get this rebate, the property must be:

● Held solely by the foreign national or by the foreign national and his or her spouse, and
● Have been used as the foreign national’s principal residence for the entire period.

Where do I get help?

If you are wondering whether NRST applies to you, or whether you are eligible for a rebate, contact us for a consultation.

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About US

Karma Legal Professional Corporation is a law firm in the GTA, Ontario, Canada, providing legal services in Family Law, Real Estate Law, Immigration Law, Wills & Estates, Criminal Law, and Notary Services at affordable rates. We accept Legal Aid Certificates (LAO).