The Non-Resident Speculation Tax (“NRST”) was raised to 25% effective October 25, 2022.
What is NRST
Any purchase and sale agreement for residential housing in Ontario that firms up on Oct 26, 2022 or thereafter will have a 25% tax for non-residents, versus the previous 20% tax. This is in addition to existing Land Transfer Taxes.
Who does the NRST apply to
The tax applies to the value of the residential property if any one of the buyers is a foreign entity or taxable trustee. For example, if a transfer of residential property is made to four transferees, one of whom is a foreign entity that acquires a 25 per cent share in the land, the NRST would apply to 100 per cent of the value of the consideration for the transfer.
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.
Rebate of NRST
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.
for more details visit https://www.ontario.ca/document/land-transfer-tax/non-resident-speculation-tax