Non-Resident Speculation Tax transitional provisions

Overview

Since the Non-Resident Speculation Tax (NRST) was introduced on April 21, 2017, there have been two increases in the tax rate, and an expansion of the geographic area in which the NRST applies. Transitional provisions allow for the rules in effect at the time an agreement was entered into to apply rather than rules in effect at the time the real estate transaction closes. This page outlines what the transitional provisions are.

Transitional tax rate of 20%

The NRST rate is 20% on a conveyance of residential property located anywhere in Ontario made pursuant to an agreement of purchase and sale or an assignment of an agreement of purchase and sale that was entered into on or after March 30, 2022, and on or before October 24, 2022. Note, the land must not be conveyed to any foreign entity or taxable trustee other than a purchaser or assignee (and their spouse, if applicable) as stated under the agreement of purchase and sale or assignment. If land is conveyed to a foreign entity or taxable trustee other than the purchaser or assignee (and their spouses), even as a result of a "direction re: title", the 25% rate will apply.

Transitional tax rate of 15%

The NRST rate is 15% on a conveyance of residential property located within the Greater Golden Horseshoe Region (GGH) made pursuant to an agreement of purchase and sale or an assignment of an agreement of purchase and sale that was entered into on or after April 21, 2017, and on or before March 29, 2022. Note, the land must not be conveyed to any foreign entity or taxable trustee other than a purchaser or assignee (and their spouse, if applicable) as stated under the agreement of purchase and sale or assignment. If land is conveyed to a foreign entity or taxable trustee other than the purchaser or assignee (and their spouses), even as a result of a "direction re: title", the 25% rate will apply.

Exemption

The exemption applies differently to land within the GGH than it does outside the GGH.

Land within the GGH

Some agreements to buy a residential property that were entered into before NRST was enacted have not closed yet, especially if the home is a new build. If you entered your agreement of purchase and sale to buy a residential property in the GGH on or before April 20, 2017, and there has been no material change to the agreement, then the NRST will not apply to your purchase. 

If you bought a residential property located in the GGH pursuant to an assignment of an agreement of purchase and sale, and the date the assignment was entered into was on or before April 20, 2017, then if there is no material change to the agreement or the assignment, the NRST will not apply to your purchase.

If you bought a residential property pursuant to an assignment of an agreement of purchase and sale, and the assignment is entered into after April 20, 2017, then the NRST may apply if the land is within the GGH, and you do not qualify for an exemption. This applies even if the agreement of purchase and sale was entered into on or before April 20, 2017. The tax rate will depend on the date the assignment of the agreement of purchase and sale was entered into.

Land outside the GGH

If you entered your agreement of purchase and sale to buy a residential property outside the GGH on or before March 29, 2022, and there has been no material change to the agreement then the NRST will not apply to your purchase. 

If on or before March 29, 2022, you bought a residential property outside of the GGH pursuant to an assignment of an agreement of purchase and sale of a residential property outside the GGH, and if there is no material change to the agreement or the assignment, the NRST will not apply to your purchase.

If you bought a residential property pursuant to an assignment of an agreement of purchase and sale, and the assignment is entered into after March 29, 2022, then the NRST may apply if you do not qualify for an exemption. The fact that the agreement of purchase and sale was entered into on or before March 29, 2022, does not mean you do not have to pay the NRST.

Greater Golden Horseshoe Region

“Greater Golden Horseshoe Region” means the area of land comprised of the geographic areas of the following municipalities:

1. City of Barrie
2. County of Brant
3. City of Brantford
4. County of Dufferin
5. Regional Municipality of Durham
6. City of Guelph
7. Haldimand County
8. Regional Municipality of Halton
9. City of Hamilton
10. City of Kawartha Lakes
11. Regional Municipality of Niagara
12. County of Northumberland
13. City of Orillia
14. Regional Municipality of Pee
15. City of Peterborough
16. County of Peterborough
17. County of Simcoe
18. City of Toronto
19. Regional Municipality of Waterloo
20. County of Wellington
21. Regional Municipality of York

Note that Land Registry Office (LRO) boundaries do not always conform to municipal boundaries and the requirement to pay NRST is determined by the municipality in which the land is situated, and not the LRO.