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Non-Resident Speculation Tax

The Ontario government introduced a 15% Non-Resident Speculation Tax (NRST) in early 2017 which was effective as of April 21st, 2017. This means that any binding Agreements of Purchase and Sale signed on April 21st, or after, will be subject to the NRST. For real estate agents, this increases the duty to find out as much information as possible about your Buyer-client. The question “Are you a Non-Resident?” should now be asked of every client.

A “Non-Resident” includes an individual who is not a citizen or a permanent resident of Canada and also includes a foreign Corporation or Entity and a taxable foreign trustee. The Tax applies to properties purchased within the Greater Golden Horseshoe area which includes Hamilton and surrounding area.

The Tax applies to land containing at least one and not more than six single family residences. That includes a single family home, duplex, triplex, fourplex, fiveplex, sixplex, detached, semi-detached, town homes and condominium units. It does not apply to multi-residential rental apartment buildings with more than 6 units, or to agricultural land, commercial land or industrial land. In an all residential Condominium Building each unit is a single family residence. In a mixed use property the value of the single family residences is subject to the new NRST and the value of the rest of the non-residential portion of the property is not subject to the tax.

If there is a group of individuals purchasing a single family residence the NRST applies to the full purchase price even if just one member of the group is a Non-Resident. Failure to pay the NRST may result in a penalty, fine and/or imprisonment. The NRST is payable on the closing dated.

There are some exceptions to the Tax and in some situations, the "non-resident" buyer can apply for a refund of the Tax paid.

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