Ontario's 25% tax on residential property purchases by foreign nationals, foreign corporations, and taxable trustees. The tax applies to properties anywhere in Ontario and is paid in addition to the regular land transfer tax at closing. Some exemptions and rebates exist for foreign buyers who become permanent residents, or for certain nominee program applicants.
Why It Matters
The NRST is one of the strongest foreign buyer taxes in North America and has significantly reduced foreign purchasing activity in the GTA. If you are not a Canadian citizen or permanent resident, this tax adds a massive cost to any property purchase. If you are a domestic buyer, the NRST helps reduce competition from international capital in the housing market.
Real-World Example
A foreign national purchases a $900,000 condo in downtown Toronto. In addition to the Ontario land transfer tax of approximately $14,475 and the Toronto municipal land transfer tax of approximately $12,475, they must pay the 25% NRST of $225,000 at closing. Their total tax bill on the purchase exceeds $250,000 before any other closing costs. If the buyer becomes a Canadian permanent resident within four years and meets all conditions, they may be eligible for a full rebate of the NRST.
Ontario & GTA Context
The NRST rate has increased over time -- it started at 15% in 2017, was raised to 20% in 2022, and then to 25% later in 2022. It applies to all residential properties in Ontario, not just those in the GTA. The Ontario government expanded the tax beyond the Greater Golden Horseshoe to the entire province in 2022. Exemptions exist for protected persons, nominees under certain immigration programs, and foreign nationals who become permanent residents within four years of purchase.
How It Works in Practice
If you are a foreign buyer, consult a real estate lawyer and immigration lawyer before purchasing to understand your NRST obligations and any potential rebate eligibility. Budget for the full NRST amount at closing, as the rebate is only available after you become a permanent resident and meet all conditions. The rebate application must be filed within the prescribed deadline.
Common Questions
Can I get the NRST refunded if I become a permanent resident?▾
Does the NRST apply to commercial properties?▾
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