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In 2017, the Ontario Provincial Government implemented a
Non-Resident Speculation Tax ("NRST"), for foreign home
buyers. Currently, the tax rate is set at 15% on a purchase or
acquisition of interest in residential property located in the
Greater Golden Horseshoe Region . Under certain circumstances,
Foreign Nationals may be eligible for a rebate on the NRST.
Generally, NRST is payable by Foreign Nationals who do not meet
an exemption. In most situations, Canadian citizens and Canadian
Permanent Residents are exempt from this tax. However, even if a
party is a Canadian citizen or Permanent Resident or a Foreign
National who meet an exemption, NRST will still be payable if that
party purchases or acquires interest in a property with other
parties who are Foreign Nationals and who do not meet an exemption.
Simply stated, if one party meets the exemption, but the other
party does not meet the exemption, NRST is still payable. There is
no reduction in the amount of NRST payable based on the amount of
interest a Foreign National (who does not meet an exemption)
acquires, even if their interest in the property is 1%.
Foreign Nationals who had to pay NRST on a recent real estate
transaction may be eligible for a full rebate. A Foreign National
may qualify for a rebate:
If they become a Permanent Resident
of Canada within four years of the date of the purchase or
acquisition (the "Closing Date" of their purchase).
If, after the closing date, they are
a student enrolled in full-time1 education continuously
for two years or more in an "approved institution"2 at a campus located in Ontario or
If, after the closing date, they are
legally working in Canada, full-time3 and have worked
continuously for a period of one year or more, under a valid work
permit.
In addition to the above criteria, the Foreign National must
have:
exclusively held the property, or
hold the property exclusively with his or her spouse, during this
period;
occupied the property as their (and
if applicable his or her spouse's) principal residence from
within 60 days after the Closing Date to the date they meet the
qualifications; and,
applied for the rebate for within
four years after the Closing Date, or if the Foreign National
becomes a Permanent Resident of Canada, the Foreign National must
have applied within four years and 90 days after the Closing
date.
Rebate applications are made using the Ontario Land Transfer Tax
Refund/Rebate form for NRST along with all supporting documentation
required to substantiate application for rebate.
If you are in the market to purchase a home in Ontario and are
unsure whether you will be required to pay NRST or are eligible to
obtain the rebate, we recommend obtaining legal
advice.
Footnotes
1 A full time student is a student enrolled in 60% or
more (40% if the individual has a disability) full course load as
defined by that institution for the academic year.
2 Under section 8 of Ontario Regulation 70/17 of the
Ministry of Training, Colleges, and Universities Act
3 Full-time work is considered to be a minimum of 30
hours, or more, of paid work per week over a 12 month period, with
a total of 1,560, or more, of paid work over that
period.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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