The Ontario government announced a new proposal to impose a 15 percent tax on purchases of residential real estate by foreign buyers as part of its Fair Housing Plan. Similar to the foreign buyer tax enacted last year by the British Columbia government, the Non-Resident Speculation Tax (NRST) is intended to cool the housing market in Ontario.
- The amount of NRST is 15% of the value of the consideration for the land.
- The NRST only applies to land in the “Greater Golden Horseshoe” area.
- The NRST is levied when one of the following persons acquires legal or beneficial ownership of land:
- The NRST applies only to a transfer of residential land; purchases of agricultural land, commercial land and industrial land are exempt. Residential land includes condo units and real estate containing up to six family residences.
- Transfers registered after the announcement date of April 20, 2017 are subject to the NRST, unless the conveyance occurs pursuant to a binding agreement entered into on or before that date.
- The proposal also permits “Toronto and potentially other interested municipalities” to introduce an additional tax on vacant homes.
- Additional details regarding the NRST will become available when draft legislation and administrative guidelines are released.