The Government of Ontario announced amendments to the Non-Resident Speculation Tax (NRST). The NRST applies to the transfer of land that contains at least one and no more than six single family residences.
The NRST applies to:
- Individuals who are not Canadian citizens or permanent residents of Canada
- Foreign corporations or taxable trustees.
The NRST applies if any one of the transferees is a foreign entity or taxable trustee, regardless of their share of ownership. For example, if a residential property transfers to 4 transferees, and even one is a foreign entity, the NRST applies to 100% of the property value.
Certain individuals will continue to be exempt from the NRST, including foreign nationals in the Ontario Immigrant Nominee Program, protected persons (refugees), spouses of Canadian citizens, or permanent residents of Canada.
As of March 30th, the NRST rate increased 5% – from 15% to 20%. It also applies across the province.
The Government hopes this increase and expansion deter non-resident investors from speculating in the housing market. Making home ownership more attainable for Ontario residents is the goal.
What does this mean going forward?
If an agreement of purchase and sale was entered into for the conveyance of land located outside the Greater Golden Horseshoe (GGH) (or the assignment of such an agreement) on or before March 29th, 2022, there is no NRST payable.
As of March 30th, 2022 the NRST is applicable province wide.
The tax applies to detached homes, semi-detached, triplexes, duplexes, townhouses and condominium units. It doesn’t matter whether a single family actually lives there, if the property is rented or if it is occupied by the owner. Multi-residential rental apartment buildings with more than six units, agricultural land, commercial land or industrial land are not subject to the NRST.
For more information, visit the Government of Ontario’s NRST webpage for details regarding the transition provisions for the tax rate, the international student rebate, and the foreign workers rebate.