Ontario Non-Resident Speculation Tax
The Ontario Non-Resident Speculation Tax (“NRST") is a 15% tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region (GGH) by certain entities. It applies in addition to the land transfer tax in Ontario. The GGH Region includes but is not limited to, Durham, Halton, Peel, Toronto and York.
Properties Subject to NRST
The NRST applies to residential properties containing at least one, but not more than six, single family residence(s). When a property includes a residential component combined with another land use type, the NRST is only applicable to the residential component of the property.
Entities Subject to NRST
The NRST applies to any foreign entity, such as a foreign corporation or a foreign national, and any taxable trustee.
A foreign national, as defined in the Canadian Immigration and Refugee Protection Act , is an individual who is not a Canadian citizen or permanent resident of Canada.
A foreign corporation means a corporation that is
not incorporated in Canada,
controlled in whole or part by a foreign entity and not listed on a Canadian stock exchange, or
controlled directly or indirectly by a foreign entity for the purposes of Section 256 of the Income Tax Act.
A taxable trustee means a trustee of
a trust with at least one trustee that is a foreign entity, or
a trust with no foreign entity trustees if a beneficiary of the trust is a foreign entity
Exemptions
An exemption may be available to the following:
A nominee under the Ontario Immigrant Nominee program at the time of purchase, who had applied for permanent residency status.
A foreign national whose refugee protection is conferred at the time of acquisition.
A foreign national who jointly purchase residential property with a spouse, who must be a Canadian citizen, permanent resident, nominee or a protected person.
It is important to note that these exemptions only apply if the foreign national is able to certify and prove that they will occupy the residence as their principal residence.
Rebate
The following situations could qualify a foreign national for a rebate at a later date and would apply from the date of purchase.
The foreign national becomes a permanent resident of Canada within four years from the date of the purchase.
The foreign national has legal full-time employment under a valid work permit for one continuous year immediately following the transfer of land.
An international student who has full-time enrolment in an approved institution located in Ontario for two continuous years immediately following the transfer of land.
To qualify for a rebate, the foreign national must exclusively hold the property, or hold the property exclusively with his or her spouse. The property must also have been occupied as the foreign national's (and, if applicable, his or her spouse's) principal residence for the duration of the period that begins within 60 days after the date of the purchase or acquisition.
Disclosure
All comments are for education purposes only, and the following information is not intended to provide legal or tax advice. The article may outline strategies or suggestions, not all of which will apply to your particular facts and circumstances. To ensure that your facts and circumstances have been properly considered and that action is taken based on the latest information available, you should obtain professional advice from a qualified legal and/or tax advisor before acting on any of the information in this article. The publisher of this article has no responsibility to any person. Under no circumstances, including, but not limited to negligence, shall we be liable for any direct, indirect, special, consequential or other damages that result from the use of, or the inability to use, the information contained in this handout. To the fullest extent permitted by applicable law, we disclaim all warranties, expressed or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose, with respect to any materials provided or obtained from or via us.
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