Before you purchase homes or income properties, talk to your realtor about how foreign buyer taxes and real estate law in Ontario affect you. They could add substantially more to the cost of buying real estate in Ontario’s lucrative housing market.
When you’re ready to buy, Axess Law has mortgage lawyers and real estate attorneys at great rates in Greater Toronto Area or Ottawa.
Taxes for Foreign Buyers in Ontario
Federal Home Buyers’ Tax
Foreign buyers who purchase, then leave residential property vacant anywhere in Canada could be charged a new one per cent tax starting in 2022, if a proposed federal law is approved.
The new Tax on Unproductive Use of Canadian Housing by Foreign Non-resident Owners encourages foreign buyers living outside Canada to rent out housing they purchase from afar.
Owners will be taxed annually unless they hire a property agent to rent out their unit or move in, making their new property their principal residence.
Real estate agents are waiting to see if the tax will apply to smaller, resort and tourism communities.
Tax on Vacant Homes in Toronto
Toronto is planning a property tax to spur homeowners into selling or renting vacant residential units. Owners who leave housing vacant would pay an annual tax under Ontario’s Fair Housing Plan. The plan stabilizes housing markets by maximizing rental units. Toronto’s tax is not yet in place, but would discourage property speculation by making buying and keeping empty units even more expensive.
Non‑Resident Speculation Tax
NRST is a 15 per cent tax on buying or acquiring interests in residential homes in Ontario’s Greater Golden Horseshoe. Expect to pay if you are a non-resident, foreign corporations (also called foreign entities) or taxable trustees acquiring between one and six single family residences.
- single family homes
- duplexes, triplexes or fourplexes
- up to six units in a boarding house
- income properties with multiple suites
- condos or townhouses
- or multiple condo units.
NRST is paid on top of Ontario’s land transfer tax and Toronto’s municipal land transfer tax.
Rental buildings with more than six units and agricultural, commercial or industrial land are exempt. NRST does not apply to mutual fund trusts, real estate investment trusts or specified investment flow‑through trusts.
But if you are business partners with a foreign buyer and they fail to pay NRTS, you could be liable for the full amount — even if you own only a small share of a property.
Ask a tax lawyer if you need advice or Axess Law can refer you to trusted legal partners if you are being asked to pay taxes you believe you are exempt from.
Getting the NRST Rebate
You could get a NRST rebate if you live in the home as your principal residence, starting within 60 days of buying or acquiring it and:
- change your status from foreign national to permanent resident within four years of buying property in Ontario
- or enroll full-time in an approved Ontario institution for at least two years from the time you buy or take over a property
- or have a valid Ontario work permit and have been employed for at least a year, working 30 or more hours a week, after buying.
Temporary NRST Relief for Foreign Buyers
Travel restrictions during the pandemic have played havoc with foreign buyers and owners.
Qualify for a NRST Rebate
The province recognizes some foreign buyers couldn’t move into their new home within the required 60 days because they couldn’t leave their own country or enter Canada. You may qualify for COVID administrative concessions that give you a NRST rebate if you were unable to occupy an Ontario home as your principal residence right away. You have up to four years from the date the NRST was due to apply or, if you are now a permanent resident of Canada, 90 days after you become a permanent resident.
How to Apply for Rebates
The COVID administrative concession is effective for residential homes bought between Jan. 17, 2020 and July 24, 2020. That means you must have been in your home by or before Sept. 22, 2020. Axess Law notary publics can witness and sign your Ontario Land Transfer Tax Refund/Rebate affidavit.
Why You Need a Lawyer
Axess Law notarizes foreign buyer tax refunds or rebates if you own vacant property in the Greater Golden Horseshoe. We can review if you qualify and check your application for completeness (extra fees apply for NRST rebate lawyer services).
Our real estate lawyers in Toronto and area or Ottawa review your agreement of purchase and sale before you buy. Or if you are renewing a mortgage for an income property you already own and need a mortgage lawyer to finalize refinancing documents, give us a call. (Questions to ask a real estate lawyer.)
Axess Law searches the title to property, checks for construction or financial liens and verifies easements that can affect how you use your property. If your deal doesn’t work out, Axess Law advises you if a real estate deal falls through who gets the deposit.
Flat Fee Legal Services Ready When You Are
Ask about our flat fee legal services in Greater Toronto Area or Ottawa. Refinancing your mortgage starts at $799.99 plus HST or you can transfer the title to a property to a family member or business associate for only $649 plus HST. We have cheap lawyers if you are buying or selling a home in Canada. Our licensed real estate lawyers in Ontario can close your deal starting at $999 plus HST for buyers and $799 plus HST for sellers.
Book Online or In Person Appointments
You can make appointments online using our easy booking form or call our 1-647-479-0118 lawyer line for appointments (toll free to 1-877-407-4207). Visit us at any of our easy to get to Axess Law locations. We have open law offices near you, 7 days a week, for day or evening appointments. If you just can’t make it in, our real estate lawyers do remote video calls online anywhere in Ontario, to your home or office.
We have onsite parking and easy transit access.