Non-Resident Speculation Tax
Learn about how the Non-Resident Speculation Tax (NRST) is applied on the purchase or acquisition of an interest in residential property in Ontario.
This online book has multiple pages. Please click on the Table of Contents link above for additional information related to this topic.
Disclaimer: The information contained on this page and its related pages is provided as a guideline only and is not intended to replace the legislation found in the Land Transfer Tax Act and its regulations.
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The NRST applies on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are foreign nationals (individuals who are not Canadian citizens or permanent residents of Canada) or by foreign corporations or taxable trustees. Effective October 25, 2022, the NRST rate is 25%.
The NRST is applied to the value of the consideration for a conveyance. See the Land Transfer Tax page for information about the value of the consideration. For information on calculating the value of the consideration on the purchase of a newly constructed home, please see Determining the Value of the Consideration for Transfers of New Homes.
The NRST applies in addition to the general Land Transfer Tax (LTT) in Ontario. It does not apply on top of the LTT.
If you entered into your agreement of purchase and sale to buy a home or you entered into an assignment of the agreement of purchase and sale on or before October 24, 2022, you may be subject to a lower rate of NRST or you may not have to pay the NRST. For more information, see our page Non-Resident Speculation Tax transitional provisions.
Entities subject to NRST
The NRST applies to foreign entities or taxable trustees who purchase or acquire residential property in Ontario. The persons purchasing or acquiring land are referred to as transferees.
Effective from January 1, 2023, to December 31, 2024, the Government of Canada has implemented a prohibition on the purchase of certain residential property in Canada by non-Canadians. The prohibition is a federal measure that operates separately from Ontario’s Non-Resident Speculation Tax (NRST). Persons who are subject to an exception under the federal prohibition may not be exempt from Ontario’s NRST. NRST is payable unless all of the requirements for an NRST exemption are met. Further information about the federal prohibition may be found on the CMHC website: Prohibition on the Purchase of Residential Property by Non-Canadians Act.
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 permanent resident means a person who has acquired permanent resident status under section 46 of the Immigration and Refugee Protection Act (Canada) and has not subsequently lost that status. The phrase permanent resident of Canada does NOT refer to whether or not you reside in Canada.
The expiry of your permanent resident card does not mean you lost permanent resident status. In Canada, permanent resident status can only be lost through an official process. If Immigration, Refugees and Citizenship Canada has revoked your permanent resident status, without having issued you Canadian citizenship, then you will be a foreign national who is subject to NRST. For more information, refer to the Government of Canada’s webpage on “Understand permanent resident status”.
If you have applied to become a permanent resident of Canada, but you have not obtained that status at the time your home transaction closes, you must pay NRST unless you are eligible for an exemption. If you become a permanent resident of Canada after the home transaction closes, you may qualify for a rebate of the NRST if you meet specific requirements. Please see our Non-Resident Speculation Tax rebates and refunds page.
If you are a Canadian citizen who buys residential property alone or exclusively along with other citizens or permanent residents of Canada, you will not be subject to NRST. It is not relevant whether any of the citizens or permanent residents of Canada live in Canada. Whether a Canadian citizen or permanent resident of Canada is considered a "non-resident" for income tax purposes is not relevant for the NRST.
A foreign corporation is a corporation that is one of the following:
- a corporation that is not incorporated in Canada
- a corporation, the shares of which are not listed on a stock exchange in Canada, that is incorporated in Canada and is controlled, directly or indirectly in any manner whatever, within the meaning of section 256 of the Income Tax Act (Canada), by one or more of the following:
- a foreign national
- a corporation that is not incorporated in Canada
- a corporation that is controlled, directly or indirectly, under section 256 of the Income Tax Act (Canada) by one or a group of foreign entities
Control of a corporation (for NRST purposes) includes both de jure control (who owns the shares that carry the voting rights to elect the majority of the board of directors) and de facto control (whether a person, despite not having the requisite share ownership, nonetheless has a right and ability to effect a significant change in the board of directors or to influence in a very direct way the shareholders who would otherwise have the ability to elect the board of directors). If the corporate documents are set up such that a foreign entity has the ability to elect the board of directors of the corporation, then the corporation is a foreign corporation.
A taxable trustee means either a trustee of:
- a trust with at least one trustee that is a foreign entity
- a trust with no foreign entity trustees if a beneficiary of the trust is a foreign entity
Taxable trustee does not include a trustee acting for the following types of trusts:
- a mutual fund trust within the meaning of subsection 132 (6) of the Income Tax Act (Canada)
- a real estate investment trust as defined in subsection 122.1 (1) of the Income Tax Act (Canada)
- a SIFT trust as defined in subsection 122.1 (1) of the Income Tax Act (Canada)
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. Examples of land containing one single family residence include a detached house, a semi-detached house, a townhouse or a residential condominium unit. Examples of designated land containing more than one single family residence include duplexes, triplexes, fourplexes, fiveplexes and sixplexes. For the purposes of the NRST, single family residences include cottages, cabins and other similar structures that are designed for occupation as the residence of a family, whether or not that family has a residence elsewhere and whether or not the structure is habitable for only part of the year. The zoning designation of the land is irrelevant for establishing whether a structure is a single family residence. Single family residences do not include a residence on agricultural land that is eligible to be classified in the farm property class prescribed under the Assessment Act.
Since a residential condominium unit and each of the structures described above are designated land for the purposes of the NRST, there would be a transfer of designated land if multiple units and/or structures are transferred together under a single conveyance. As an example, if two fourplexes are transferred under a single conveyance, there would be a transfer of designated land and the NRST may be applicable. If seven or more residential condominium units are transferred under a single conveyance, there is a transfer of designated land and the NRST may be applicable.
The NRST does not apply to other types of land such as land containing 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 residential property and land used for non-residential purposes, the NRST applies on the portion of the value of the consideration attributable to the residential property. Take for example a transaction where the value of the consideration is $3,000,000 and the land contains:
- one single family residence with a value of the consideration of $1,400,000
- land used for commercial purposes with a value of the consideration of $1,600,000
In the above example, the NRST would apply to only the $1,400,000 portion.
A reasonable self-assessment is required by taxpayers in apportioning the value of the consideration for the purposes of the NRST. Apportionment is only available if the non-residential property is used for non-residential purposes exclusively. The taxpayer must be able to demonstrate that this portion of the land is used for non-residential purposes, such as commercial activity. The apportionment would be based on the value of the consideration that is attributable to the residential property as compared to the non‑residential property, not the square footage of the two.
Who pays NRST
The NRST applies to the value of the consideration for the 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 three transferees, one of whom is a foreign entity that acquires a 33% share in the land, the NRST would apply to 100% of the value of the consideration for the transfer.
As an example, Tomoko, Shoshana, and Lieven buy a home together. Tomoko acquires 33%, Shoshana acquires 33% and Lieven acquires 34% interest, with a value of the consideration of $1,500,000. Tomoko and Shoshana are Canadian citizens, but Lieven is a foreign national. The NRST is applied to the full value of the consideration, resulting in NRST payable of $375,000. They do not pay NRST on just 34% of the value of the consideration. The NRST is not prorated to the interest acquired by the foreign national.
Each transferee is 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, permanent residents of Canada or non-foreign corporations.
Exemptions from the NRST
An exemption from NRST may be available for registered transfers if the transferee is a nominee, a protected person or a spouse of a Canadian citizen, a permanent resident of Canada, a nominee or a protected person. Exemptions in the Act and its regulations that apply to LTT also apply to the NRST.
Supporting documentation may be required by the ministry to substantiate all claims for an NRST exemption.
To learn more, refer to our page on: Transfers that are exempt from the NRST.
Rebate and refund of the NRST
A rebate of the NRST, may be available for registered transfers if the transferee becomes a permanent resident of Canada. If the land purchased is within the Greater Golden Horseshoe Region of Ontario, and if a binding agreement of purchase and sale was signed on or before March 29, 2022, and not assigned to other persons after March 29, 2022, then a foreign national may qualify for the International Student NRST Rebate or the Foreign National Working in Ontario NRST Rebate.
A refund of the NRST may be available for eligible transferees if the tax has been improperly paid or overpaid.
Supporting documentation will be required to substantiate all applications for a rebate or refund.
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. 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.
NRST interest is compounded daily and interest rates are reset every 3 months.
Interest on an NRST rebate or refund begins to accrue 40 business days after a complete NRST rebate or refund application has been received by the ministry. The only exception is for a refund resulting from a successful objection or appeal from an assessment of the NRST, in which case interest begins the day after payment.
An NRST rebate or refund application is not complete until all supporting documentation has been received by the ministry. The 40-business day period does not begin until all information and documentation to support the rebate or refund application has been received. For current interest rates on NRST refunds and rebates, please see the ministry's data page on Tax Interest Rates.
Note: Interest on a refund as a result of a successful objection or appeal from an assessment of the NRST will be consistent with the general LTT refunds. For more information, refer to Ontario Regulation 182/17: Tax Payable Under Subsection 2(2.1) of the Act by Foreign Entities and Taxable Trustees and Ontario Regulation 398/96: Interest on Tax Refunds made under the Land Transfer Tax Act.
If this page or its related pages do not completely address your situation, refer to the Land Transfer Tax Act and related regulations, or contact us by:
- email: LTTGeneral@ontario.ca
- telephone toll free:
- teletypewriter (TTY):
- mail: Ministry of Finance, Land Taxes Section, 33 King Street West, Oshawa ON L1H 8H9
Request an interpretation
To obtain an interpretation on a specific situation not addressed, please send your request by:
- Email: Advisory Services
- Mail: Ministry of Finance, Advisory Services, 33 King Street West, 3rd Floor, Oshawa ON L1H 8H9
All requests for an interpretation must include:
- taxpayer’s full name
- authorizing or cancelling a representative form sign by the taxpayer (if you are not the taxpayer)
- all documentation relating to the interpretation request. This could include a copy of the agreement of purchase and sale, statement of adjustments, proof of citizenship status in Canada, a copy of the Transfer/Deed (should the transfer have already occurred)
- Authorizing or Cancelling a Representative
- Ontario Land Transfer Tax Refund / Rebate Affidavit
- Direct Deposit Request / Direct Deposit Authorization
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