Ontario is Increasing Non-Resident Speculation Tax to 20%

Effective March 30, 2022, the Non-Resident Speculation Tax (NRST) rate was increased to 20 per cent and expanded provincewide. As a result, the NRST may apply on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are foreign nationals (individuals who are not Canadian citizens or permanent residents of Canada) or by foreign corporations or taxable trustees.

The NRST applies in addition to the general Land Transfer Tax (LTT) in Ontario.

Prior to March 30, 2022, the NRST was a 15 per cent tax on the purchase of an interest in residential property in the Greater Golden Horseshoe Region (GGH) of Ontario by individuals who are foreign nationals or by foreign corporations or taxable trustees.

Types of Property Subject to NRST

The NRST applies to the transfer of “designated land”, which is land that contains at least one and not more than six single family residences. Examples of land containing one single family residence include a detached house, a semi detached house, a townhouse or a condominium unit. Examples of land containing more than one single family residence that are subject to the tax include duplexes, triplexes, fourplexes, fiveplexes and sixplexes.

Rebate of NRST

For a conveyance that occurs after March 29, 2022 for which the transitional provision described below does not apply, only the Permanent Resident NRST Rebate remains available. Note that any applicable NRST is payable at the time of the registration of a conveyance. Registrants who fail to pay NRST at registration may be assessed for tax, penalty and interest, even if subsequently eligible for a rebate.

A rebate of NRST may be available for a foreign national who becomes a permanent resident of Canada. To qualify for this rebate, the foreign national must have paid the NRST and:

• become a permanent resident of Canada within four years from the date of the purchase or acquisition,
• hold the property alone or with their spouse (as defined above) only, and
• occupy the property, along with their spouse, if applicable, as their principal residence for the duration of the period that begins within 60 days after the date of purchase and ends when they make an application for the rebate or the rebate conditions have been met, whichever is later.

Former NRST Rebates

A foreign national may qualify for the International Student NRST Rebate or the Foreign National Working in Ontario NRST Rebate if the land purchased is within the GGH, and if a binding agreement of purchase and sale was signed on or before March 29, 2022, and not assigned to other persons after March 29, 2022,

For complete detail of Ontario NRST, please visit government Ontario website https://www.fin.gov.on.ca/en/bulletins/nrst/