Ontario Non-Resident Tax Overview
If you sell residential real estate in the Great Golden Horseshoe Area (GGH), which includes Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York (please see map); then your non-resident clients slapped with an extra 15% Provincial Tax on any residential real estate they purchased as of April 21st.
In this short article we will try to explain what the Non-Resident Speculation Tax (NRST) is, and how it will affect your foreign buyers.
What is NRST?
NRST is a 15% tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe (GGH) by individuals who are not citizens or permanent residents of Canada or by foreign corporations (“foreign entities”) and taxable trustees.
The NRST applies in addition to the general land transfer tax in Ontario.
Who is subject to NRST?
1) Foreign National
- Not a Canadian citizen
- Not a permanent resident of Canada
2) Foreign Corporation
- Not incorporated in Canada
- Is incorporated in Canada but is controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange
- Is controlled directly or indirectly by a foreign entity for the purposes of section 256 of the Income Tax Act (Canada)
What types of properties are subject to NRST?
The NRST applies to the transfer of land which contains at least one and not more than six single family residences (detached and semi‑detached houses, townhouses, condominium units, duplexes, triplexes, fourplexes, fiveplexes and sixplexes).
If the property is mixed use, the NRST will be only applied to the residential value of the property, not the commercial portion.
What and who are exempt from NRST?
The NRST does not apply to other types of land such as multi‑residential rental apartment buildings with more than six units, agricultural land, commercial land or industrial land.
1) Foreign national who receives confirmation under the Ontario Immigrant Nominee Program (“nominee”) – confirmed at the time of purchase/acquisition and property must be their principal residence
2) Foreign national who is conferred the status of “convention refugee” or “person in need of protection” (“refugee”) under the Immigration and Refugee Protection Act at the time of the purchase or acquisition.
3) Foreign national who has a spouse who is a Canadian citizen, permanent resident of Canada, “nominee” or “refugee” – if property purchased with that spouse.
We hope this helps you understand the NRST a bit better, but we encourage you to read the full article by the Ontario Ministry of Finance by CLICKING HERE.
If you have any questions about how this tax will specifically affect your clients, please call the Ontario Ministry of Finance: 1‑866‑ONT‑TAXS (1‑866‑668‑8297)
About Royal LePage Vision
Founded in 2003, Royal LePage Vision, in Toronto, is a multiple award-winning brokerage with a strong contingent of high-performing agents. Our strength over the past 13 years is rooted in technology and how innovation translates to exceptional service.
From top to bottom our brokerage is built on making it easier for our Realtors to succeed in real estate while staying consistently connected to the office. With a strong emphasis on training, for both our support staff & Realtors, each one of our Realtors has the support and tools to be effective in their market.
If you would like to learn more about the difference VISION makes, please give us a call at 416-321-2228 or visit moveuptoroyallepage.com.