Non-Resident Speculation Tax
The non‑resident speculation tax (NRST) is a 15 per cent 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.
The GGH includes the following geographic areas: Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York. Refer to the map at the end of the document.
Upon the enactment of legislation, the NRST will be effective as of April 21, 2017.
Binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST.
Entities subject to the NRST
The NRST applies to foreign entities or taxable trustees who purchase or acquire residential property in the GGH.
A foreign entity is either a foreign national or a foreign corporation.
A foreign national, as defined in the Immigration and Refugee Protection Act (Canada), is an individual who is not a Canadian citizen or permanent resident of Canada.
A foreign corporation is a corporation that is one of the following:
- Is 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; or
- Is controlled directly or indirectly by a foreign entity for the purposes of section 256 of the Income Tax Act (Canada).
For the purposes of the NRST, a taxable trustee is a trustee that is one of the following:
- A foreign entity holding title in trust for beneficiaries, or
- A Canadian citizen, permanent resident of Canada, or a corporation holding title in trust for foreign entity beneficiaries.
Types of property subject to the NRST
The NRST applies to the transfer of land which contains at least one and not more than six single family residences. Examples of land containing one single family residence include detached and semi‑detached houses, townhouses and condominium units. In a situation involving the purchase of multiple condominium units, each unit would be considered land containing one single family residence. Examples of land containing more than one single family residence that are subject to the tax include duplexes, triplexes, fourplexes, fiveplexes and sixplexes.
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.
The NRST applies on the value of the consideration for the residential property. If the land transferred includes both residential property and another type of property, the NRST applies on the portion of the value of the consideration attributable to the residential property. For example, if the purchase price of the transaction is $1,000,000 and contains one single family residence with a value of the consideration of $400,000, and commercial land with a value of the consideration of $600,000, the 15 per cent NRST would only apply to the $400,000 portion.
The 15 per cent NRST applies to the value of the consideration for a transfer of residential property if any one of the transferees 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.
Each transferee is jointly and severally liable for any NRST payable. If a foreign entity or taxable trustee does not pay the NRST, the other transferees will be required to pay the tax. This applies even if the other transferees are Canadian citizens or permanent residents of Canada.
The NRST does not apply when a person purchases or acquires residential property as a trustee of a mutual fund trust, real estate investment trust or specified investment flow‑through trust.
The NRST applies to unregistered dispositions of a beneficial interest in residential property. This includes purchases and acquisitions of residential property where section 3 of the Land Transfer Tax Act is applicable.
An exemption to the NRST is available to a foreign national who receives confirmation under the Ontario Immigrant Nominee Program (“nominee”). To qualify for this exemption, the foreign national must be confirmed under the Ontario Immigrant Nominee Program at the time of the purchase or acquisition and the property must be used as the foreign national’s principal residence.
An exemption is also available to a 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.
A foreign national who has a spouse (as defined in the Land Transfer Tax Act), who is a Canadian citizen, permanent resident of Canada, “nominee” or “refugee” is exempt from the NRST if the foreign national jointly purchases residential property with that spouse.
However, the exemption does not apply if the Canadian citizen, permanent resident of Canada, “nominee”, or “refugee” and his or her foreign national spouse purchased the property with another foreign national. For example, if three parties purchase a property as follows:
- one Canadian citizen and his or her foreign national spouse; and
- a third party who is a foreign national,
the exemption would not apply and NRST would be payable.
A rebate of the NRST may be available in the following situations:
- The foreign national becomes a Canadian citizen or permanent resident of Canada within four years of the date of the purchase or acquisition;
- The foreign national is a student who has been enrolled full‑time for at least two years from the date of purchase or acquisition in an “approved institution”, as outlined in Ontario Regulation 70/17 of the Ministry of Training, Colleges, and Universities Act; or
- The foreign national has legally worked full‑time in Ontario for a continuous period of one year since the date of purchase or acquisition.
In order to be eligible for the rebates, the foreign national must exclusively hold the property, or hold the property exclusively with his or her spouse. The property must also have been used as the foreign national’s (and if applicable their spouse’s) principal residence for the duration of the period.
The rebate will be paid with interest, calculated at the prescribed refund rate under the Land Transfer Tax Act.
Supporting documentation will be required to substantiate all applications for rebates.
Tax avoidance and offences
All transfers of land in Ontario are subject to audit.
Anti‑avoidance provisions will be enforced to ensure the NRST is reported and paid as required. This includes examining circumstances where Canadian citizens or permanent residents of Canada, as taxable trustees, hold property in trust for a foreign entity or are trustees where a beneficiary may be a foreign entity. This also includes preventing the use of multiple conveyances to avoid the NRST.
Failure to pay the NRST as required may result in a penalty, fine and/or imprisonment.
If you have administrative or technical questions about the NRST, contact:
Ministry of Finance Land Tax Section 33 King Street West Oshawa ON L1H 8H9
- 1‑866‑ONT‑TAXS (1‑866‑668‑8297)
- Fax: 905‑433‑5770
- 1‑800‑263‑7776 for teletypewriter (TTY)
All information used is from the Ministry of Finance.
For the map of the Greater Golden Horseshoe visit