Are you a foreigner looking to buy a home in Toronto? Here’s what you should know prior to the purchase and sale of real estate in Toronto and the surrounding area.
Before we get started, it is important to note that the Toronto housing market has been growing rapidly in recent years. In fact, the current average selling price of a home in Toronto is around $900,000, versus $653,129 in 2015. In response to this price growth, the Ontario government introduced a few policies in an attempt to stabilize the housing market - including the Foreign Buyer Tax.
What's the Foreign Buyer Tax?
In April of 2017, Toronto’s provincial government introduced a Non-Resident Speculation Tax (NRST) also know as the Foreign Buyers Tax. The Foreign Buyer’s Tax is a tax payment of 15% on the purchase price of the property.
Who does it apply to?
The NRST must be paid by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) looking to acquire real estate in the Greater Golden Horseshoe Region (GGH), map below.
The GGH includes the following geographic areas:
- City of Barrie
- County of Brant
- City of Brantford
- County of Dufferin
- Regional Municipality of Durham
- City of Guelph
- Haldimand County
- Regional Municipality of Halton
- City of Hamilton
- City of Kawartha Lakes
- Regional Municipality of Niagara
- County of Northumberland
- City of Orillia
- Regional Municipality of Peel
- City of Peterborough
- County of Peterborough
- County of Simcoe
- City of Toronto
- Regional Municipality of Waterloo
- County of Wellington, and
- Regional Municipality of York.
An exemption from the NRST may be available for some individuals in the following situations:
- Nominee – A foreign national who is nominated under the Ontario Immigrant Nominee Program (nominee) at the time of the purchase.
- Protected person – A foreign national on whom refugee protection is conferred (protected person) under section 95 of the Immigration and Refugee Protection Act (Canada) at the time of the purchase
- Spouse – A foreign national who jointly purchases residential property with a spouse, who is a Canadian citizen, permanent resident of Canada, nominee or protected person
Is there a rebate?
On a positive note, some buyers may be eligible for a full Foreign Buyer’s Tax Rebate. A rebate of the NRST may be available in the following situations:
- The foreign buyer becomes a permanent resident of Canada within four years of the date of the purchase
- The foreign buyer is a student who has been enrolled full-time for a continuous period of at least two years from the date of purchase or acquisition in an “approved institution”
- The foreign buyer has legally worked full-time under a valid work permit in Ontario for a continuous period of at least one year since the date of purchase
For more information please visit The Ontario Government's Bulletin here.
Have any unanswered questions or would like to learn more about investing in Toronto? Visit Dwelly.ca where you can ask questions about single family residences and multi-family residential units via our live chat.
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