Non-Resident Speculation Tax: What You Need to Know

By: Michael Podrebarac

Associate, HGR Graham Partners LLP

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In an effort to curb rising house prices in certain areas of the Province, the Ontario government has introduced a Non-Resident Speculation Tax (the “NRST”) payable by certain individuals and entities that purchase or acquire an interest in a residential property with one to six units within the “Greater Golden Horseshoe”.  The NRST is payable on applicable transactions as of April 21, 2017.  The NRST is 15% of the value of the consideration payable by the purchaser.  Therefore, consideration other than cash such as the value of a mortgage assumed by the purchaser is relevant when calculating the amount payable.

Who Has to Pay?

The NRST is payable by individuals who are not Canadian citizens or who are not permanent residents of Canada, otherwise known as “foreign nationals”.  A corporation incorporated outside of Canada, a corporation controlled even partly by a foreign national or foreign Corporation, and certain types of trusts are also required to pay the NRST.

When is the NRST NOT applicable?

The NRST does not apply in the following instances:

  • Contracts for the sale of applicable properties signed before April 20, 2017. In other words, the NRST does not apply retroactively;
  • The purchase of applicable properties by Canadian citizens or permanent residents;
  • The purchase of commercial, industrial, agricultural or residential properties with more than 6 units;
  • Properties located outside of the Greater Golden Horseshoe; and
  • Corporations listed on a Canadian stock exchange.

There are others who are exempt from the NRST, but such examples will occur on such an infrequent basis to be beyond the basic nature of this paper.

Types of Property Subject to the NRST

As noted above, the NRST is applicable to the acquisition of residential properties containing between one and six units, including detached dwellings, semi-detached dwellings, condominium units and multi-residential properties such as a duplex or a triplex.

What is the Greater Golden Horseshoe?

The areas that make up the Greater Golden Horseshoe are identified  in the map below:

Non Resident Speculation Tax Map


How Is the NRST Paid?

At the moment, the NRST is payable prior to the closing of the transaction to which it applies.  Payment is made at the Oshawa office of the Minister of Finance.  Once paid (and the other Ministry requirements described below are satisfied) a receipt and a receipt number are provided by the Ministry.  The receipt number must be inserted into the electronic transfer of the property in order for the transfer to be in registrable form.

Eventually, Teraview, the electronic land registration system in Ontario, should be able to collect the NRST automatically when a transfer is registered in the same way that land transfer tax is currently collected.

In addition to payment, a copy of the agreement of purchase and sale, statement of adjustments, appraisal (if the value of the consideration is based on the fair market value of the property) or other documents required to determine the value of the consideration, are required to be submitted.


If a foreign national has a spouse who is a Canadian citizen (or other individual to whom the NRST does not apply) the NRST is not applicable if the foreign national purchases a property with his or her spouse.  In this context, “spouse” means two who are legally married, have cohabited continuously for a period of not less than three years, or are in a relationship of some permanence if they are parents of a child.  However, if a third party acquires the property with the foreign national and the foreign national’s spouse, the NRST is applicable.

If there are multiple purchasers, and only a fraction of the purchasers are individuals or entities subject to the NRST, the NRST is payable on the full value of the consideration.

This paper is designed to provide a basic outline of the NRST, and is not intended to be legal advice or an exhaustive analysis.  Please feel free to contact me with any questions about the NRST and its application to your purchase.




Phone: 705.737.1249 ext. 178

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