Notice about Ontario’s Non-Resident Speculation Tax
There is a 15% Non Resident Speculation Tax added onto the price of any property if there is even one foreign national on title if the property is located within the Greater Golden Horseshoe region in Ontario.
Definition of foreign national: non Canadian passport or permanent resident card holders.
No loophole is possible by using corporations or trusts.
EXEMPTIONS AND REBATES
1The foreign national has been nominated by Ontario and declared to apply for immigration.
2The foreign national has been conferred refugee protection.
3The foreign national purchases the property along with a Canadian spouse and declares to occupy the property as their principal residence.
Rebates: It means paying the NRST on purchase and then applying for refund later. 1. The foreign national has a work permit and works in Ontario for a continuous period of at least one year, with 1560 hours of paid work.
2. The foreign national has a study permit and study in Ontario for at least two years in an approved post-secondary institution.
3. The foreign national has become a permanent resident of Canada within 4 years following the date of the purchase.
Tax Compliance for non-resident property owners
Rental In general, 25% of withholding tax on the gross rent or net rent.
Tax filing cycle 1.File NR6 to apply for NR tax on net rent
2. File NR4 after paying the tax
3.File Section 216 tax return (T1159)
Sale In general, 25% of withholding tax on the gross selling price or the capital gain
Tax filing 1.File T2062 to apply for tax clearance
2.Lawyer withholds 25% of the gross selling price at the legal trust account
2.1Pay tax assessed (25% of capital gain) to Canada Revenue Agency
3. Lawyer releases the balance of fund after receiving the tax certificate
4.File Section 116 tax return to get tax refund
Service fees 5.Annual filing of NR6, NR4 and T1159: $600 plus 13% HST
5.1Tax clearance at selling: $1,200 plus 13% HST
WHO QUALIFIES FOR THE REBATE?
Purchases from Hong Kong or China who have become citizens or permanent residents of Canada within 4 years of purchasing the property
Full time international students who have been enrolled for at least 2 years in an Ontario institution (college/university) after purchasing a property
FOREIGN NATIONALS WORKING IN ONTARIO FULL TIME
If you have been employed full time for a year from the date of purchasing the property
"Non Resident Speculation Tax (NRST) or Foreign Home buyer Tax is a 15% tax on ALL residential properties sold to anyone who is NOT a citizen or permanent resident of Canada"
APPLY FOR REBATE
To get a rebate you must apply within 4 years of when the NRST is payable (closing of property)
example. If your property closes Jan 1 2019, you have to apply for your rebate BEFORE Jan 1 2023
**Permanent residents must apply for rebate within 90 days of becoming a Permanent resident**