The Non-Resident Speculation Tax (NRST) is a new Ontario provincial tax which may be payable on purchase transactions when the Agreement of Purchase and Sale was signed on or after April 21, 2017. NRST must be paid when all three of the following conditions are met:
- Any purchaser is not a citizen or permanent resident of Canada (a “Foreign National”) or any purchaser is a foreign corporation or taxable trustee; and
- You are purchasing a residential single family residence, duplex, triplex, fourplex, fiveplex, or sixplex; and
- The property is in the Greater Golden Horseshoe (Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington, and York).
When payable, NRST is charged at a rate of 15% of the purchase price of the property. NRST and the applicable Land Transfer Tax (LTT) payable in connection with the purchase must be paid directly to the Ministry of Finance several days in advance of the closing date.
If you are required to pay NRST, you may become eligible to obtain a NRST rebate in the future if all three of the following conditions are met:
- After the closing date of your purchase:
a. You become a citizen or permanent resident of Canada within four (4) years; or
b. You are a student enrolled full-time for at least two (2) years in an approved institution under Regulation 70/17 of the Ministry of Training, Colleges, and Universities Act; or
c. You have legally worked full-time in Ontario for at least one year; and
- You own the property alone or jointly with your spouse only. You may not own the property jointly with a non-spouse; and
- You, and your spouse if applicable, have lived in the property as your principal residence for the time specified in paragraph 1 above.
There are also limited exemptions to the payment of NRST for eligible Foreign Nationals. A member of our Real Estate team can assist you in determining if you are eligible for an exemption.
Please note that any knowledge gained from information here cannot be used as legal advice unless under legal retainer from PDC. See our Terms of Service for more information