How Does The Non-Resident Speculation Tax Affect Me?

How Does The Non-Resident Speculation Tax Affect Me?

In an effort to curb skyrocketing real estate prices in th GTHA, the Ontario Goverment has proposed a new Non-Resident Speculation Tax ("NRST") that would impose a 15% tax on the purchase of redidential property in the region by foreign interests.

If the tax passes the legislature, it will be effective as of April 21, 2017.

If you are purchasing a home after that date, your real estate lawyer will now have to prepare additional documentation to confirm whether or not the NRST applies to your purchase.

The NRST applies to purchasers of property in the Greater Golden Horseshoe Area (which includes the areas listed below) if the purchasers are:

  • individuals who are NOT Canadian citizens or permanent residents
  • foreign corporations
  • foreign trustees, or trustees of trusts where the beneficiaries are foreign

If the NRST is applicable to your purchase, you will have to pay it prior to completing the purchase transaction, as a receipt number must be included with your registered documentation.  The amount of the tax is 15% of the purchase price of the property.  All of the purchasers of a particular property are liable for the NRST.

There are some exemptions to the NRST, including but not limited to:

  • a foreign national who receives confirmation under the Ontario Immigrant Nominee Program (had the confirmation at the time of purchase) and who uses the property as his or her principal residence
  • a foreign national considered a "person in need of protection" or "convention refugee" under the Immigration and Refugee Protection Act at the time of purchase
  • a foreign national purchasing property jointly with a spouse who is exempt from the NRST (but no other foreign nationals can be joint purchasers of this property).

Even if you have to pay the NRST, you may be able to apply at a later date for a rebate if you become a Canadian citizen, are a full time student, or legally work in Ontario for at least one year.  However, there are additional requirements, so you should contact a lawyer or other qualified professional for assistance.

In addition to the NRST, the provincial government has also made some changes to the Land Transfer Tax system that will require your lawyer to gather information from you regarding, among other things, your citizenship status, whether the purchaser or a family member intends to live in the property or lease it out, and the type of dwelling being purchased.

The Greater Horseshoe Area is comprised of the following municipalities: Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington, and York.

To learn more about how the NRST might affect you, click the link below to request your own personal consultation with our local Burlington office:

http://www.mhalaw.ca/contact/request-consultation

About the Author

Emma O'Donnell

Emma O'Donnell

Emma is a lawyer in Burlington who is proud to serve her local community with real estate, business law and wills & estates expertise. When she is not at the office you will probably find Emma either spending time with family, playing sports, or in one of Ontario’s many ice rinks as she is heavily involved with the sport of short track speed skating as a club coach with the Oakville Speed Skating Club.

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