This guide is general information for educational purposes only. It is not legal, tax or financial advice. Speak with a qualified lawyer, accountant or tax professional about your situation.
Ontario's Non-Resident Speculation Tax is 25%, Toronto adds 10%, and the federal foreign buyer ban runs to January 1, 2027. How the rules fit together.
This is for international buyers, families with members abroad, and the Canadian advisors who structure purchases for them. The question is simple: if someone who is not a Canadian citizen or permanent resident buys a home in Toronto, what does it cost, and are they even allowed to buy?
The short answer: Under the standard rules, Ontario charges a 25% Non-Resident Speculation Tax on the full price and Toronto adds 10%, unless an exemption applies, and a separate federal ban stops most non-Canadians from buying homes at all until it is scheduled to end on January 1, 2027. The ban and the taxes are separate rules.
What is the Non-Resident Speculation Tax in Ontario?
The Non-Resident Speculation Tax (NRST) is a provincial tax paid when a "foreign entity" buys residential property anywhere in Ontario. According to the Ontario Ministry of Finance, the rate has been 25% since October 25, 2022. It is charged in addition to the regular Ontario land transfer tax.
A foreign entity is either a foreign national or a foreign corporation. For Ontario NRST, a foreign national is neither a Canadian citizen nor a permanent resident, excluding people registered under the federal Indian Act. Foreign corporations include Canadian corporations not listed on a Canadian stock exchange and controlled by foreign entities.
The tax also reaches "taxable trustees": trustees of trusts with a foreign trustee or foreign beneficiary, subject to exclusions for specified investment trusts.
Two details matter. First, permanent residency is a legal status, not a question of where you live. A Canadian citizen living in London buying alone, personally, pays no NRST.
Second, if any one buyer on title is a foreign entity or taxable trustee, the standard 25% applies to 100% of the price unless exempt, not to that person's share.
What property does it cover?
The NRST applies to land containing one to six single family residences: houses, townhouses, condominium units, cottages, and duplexes through sixplexes. Since March 27, 2024, standalone condominium parking and storage units are also covered.
It does not apply to rental apartment buildings with more than six units. For mixed-use land, the residential portion can remain taxable; a farm residence is excluded only on land eligible for the farm property class.
In Toronto, the City also charges a Municipal Non-Resident Speculation Tax (MNRST) of 10% on the purchase price, effective January 1, 2025. It covers foreign entities and taxable trustees and uses the same one-to-six-residence property test. The City has said there is no grandfathering for agreements signed before that date.
How is the NRST calculated on a Toronto home?
The NRST is a flat percentage of the "value of the consideration", which is essentially the price paid, including any mortgage the buyer assumes. There are no brackets. The land transfer taxes, by contrast, are graduated, and Toronto introduced higher municipal brackets above $3,000,000 for one and two unit homes as of April 1, 2026.
Here is a hypothetical $3,500,000 resale detached home in Toronto, bought under a new agreement and closing on or after April 1, 2026, with no rebates or exemptions. The value of consideration is $3,500,000. I compare a citizen buying personally with a foreign national holding a qualifying work permit, whose purchase is permitted under the federal exception.
| Tax | Rate basis | Canadian buyer | Foreign national |
|---|---|---|---|
| Ontario land transfer tax | Graduated, 2.5% above $2M | $73,975 | $73,975 |
| Toronto land transfer tax | Graduated, 4.40% from $3M to $4M | $83,475 | $83,475 |
| Ontario NRST | 25% of price | $0 | $875,000 |
| Toronto MNRST | 10% of price | $0 | $350,000 |
| Total | $157,450 | $1,382,450 |
On these assumptions, the foreign buyer pays roughly 39.5% of the price in transfer and speculation taxes, against about 4.5% for a Canadian. The provincial figures use the Ministry of Finance rate schedule. These totals exclude administrative fees and other closing costs. Ask your lawyer to confirm the final numbers.
Which NRST exemptions and rebates still exist?
An exemption means the tax is never paid. The three main personal exemptions require registered transfers and every buyer to certify that they will occupy the home as their principal residence within 60 days of registration:
- Nominee: a foreign national nominated under the Ontario Immigrant Nominee Program on closing, who has applied or commits to apply for permanent residency before the nominee certificate expires.
- Protected person: a foreign national with refugee protection under federal immigration law.
- Spouse: a foreign national buying jointly with a spouse who is a Canadian citizen, permanent resident, nominee or protected person.
Other co-buyers must meet the permitted status requirements, and a taxable trustee cannot claim these exemptions. General land transfer tax exemptions can also apply to NRST. The provincial definition of spouse includes qualifying common-law relationships; it differs from the federal definition.
A rebate means you pay at closing and may recover it later. The main one is the permanent resident rebate. The buyer must become a permanent resident within four years of registration, hold the home alone or with a spouse, and occupy it as a principal residence starting within 60 days of registration.
Occupancy must continue until the application or satisfaction of the rebate conditions, whichever is later. The application must reach the Ministry within 180 days of becoming a permanent resident. The rebate requires a registered transfer and is unavailable to taxable trustees.
Toronto offers a matching MNRST rebate, but its window is 90 days, not 180. Its ownership and principal-residence conditions must also be met. The old rebates for international students and foreign workers are gone; Ontario closed the last transitional applications on March 31, 2025.
A narrow industrial use rebate exists for eligible transfers on or after November 6, 2025, subject to reclassification and application deadlines.
What does the federal foreign buyer ban prohibit?
The Prohibition on the Purchase of Residential Property by Non-Canadians Act makes it illegal for a non-Canadian to buy, directly or indirectly, residential property in Canada. It took effect January 1, 2023.
A non-Canadian includes individuals who are neither citizens nor permanent residents nor registered under the Indian Act, foreign corporations, and Canadian corporations not listed on a designated Canadian stock exchange and controlled by non-Canadians.
"Residential property" here is narrower than under the NRST: a house or similar building with up to three dwelling units, or a semi-detached, rowhouse or condominium unit. Under the federal regulations, "control" includes at least 10% of equity or votes, or control in fact, and property outside census metropolitan areas and census agglomerations is excluded.
The main exceptions include:
- Temporary residents holding a work permit or qualifying work authorization with at least 183 days remaining at purchase, subject to the one-property limit.
- Temporary residents enrolled in authorized study at a designated learning institution: all required tax returns for the five preceding taxation years, at least 244 days in Canada in each of the five preceding calendar years, a price no higher than $500,000, and the one-property limit.
- A non-Canadian buying with a spouse or common-law partner who is a citizen, permanent resident, person registered under the Indian Act, or otherwise qualifies under the specified federal exceptions.
- Protected persons and eligible refugee claimants.
- Acquisitions for the purpose of development, and acquisitions by individuals through death, divorce, separation or gift.
The penalty is a fine of up to $10,000, for the buyer and for anyone who knowingly helps. Following a conviction, a court can also order the home sold on the Minister's application, with the buyer recovering no more than the original purchase price.
When does the foreign buyer ban expire?
The ban was first set to expire on January 1, 2025. In February 2024 the Department of Finance announced a two-year extension, and Parliament enacted it in the Budget Implementation Act, 2024, No. 1. The repeal now takes effect on the fourth anniversary of the ban's start, which is January 1, 2027.
As of July 28, 2026, the legislated repeal date remains January 1, 2027. Ottawa could still extend, modify or replace the ban before that date, so I would not underwrite a 2027 purchase on the assumption that it simply ends.
For budgeting, the NRST and Toronto's MNRST have no expiry date. Even if the federal ban lapses, a foreign buyer of a Toronto home subject to both standard taxes, without exemptions, would still face 35% in speculation taxes. Ontario's own guidance notes that qualifying for a federal exception does not necessarily exempt you from the NRST.
What this means for you
Luxury buyers with family abroad: structure title before you sign. A citizen or permanent resident buying alone, personally, pays no NRST. Adding a foreign relative to title, even at 1%, can trigger the standard 35% on the full residential price in Toronto unless exempt.
If a spouse is a foreign national, the spousal exemption may apply, but only with the 60-day occupancy commitment.
Work permit holders and incoming executives: you may be allowed to buy under the ban but still owe the full NRST and MNRST at closing. I model the rebate as a possible recovery, not as cash in hand. Track both rebate deadlines from the date permanent residency is granted, not the date the card arrives.
Investors and rental owners: a single rental apartment building with seven or more units, without separate condominium titles, sits outside the NRST and federal ban property definitions. For context, see my overview of multifamily assets. The caveat: buying seven or more condominium units in one transfer can still attract the NRST, and ownership structures need careful legal review.
Pre-construction purchasers: assignment buyers who are foreign entities must check the same rules. For registered purchases, NRST is calculated on the value of the consideration and paid at registration; older agreements and assignments may qualify for transitional treatment. My notes on assignments in 2026 and the wider policy backdrop cover the market side.
For the tax mechanics, your real estate lawyer and accountant should run the numbers before any offer.
Frequently asked questions
Does a Canadian citizen living abroad pay the NRST?
No. The NRST depends on legal status, not where you live. A Canadian citizen buying alone, personally, is not subject to NRST or MNRST; ordinary land transfer taxes still apply.
Can a foreign buyer avoid the NRST by buying through a Canadian corporation?
Generally not. A Canadian corporation not listed on a Canadian stock exchange and controlled by foreign entities is treated as a foreign corporation for NRST purposes, and Ontario applies anti-avoidance rules to trusts and multiple conveyances.
Is the NRST charged on a sixplex?
Yes. Land with up to six single family residences is covered. A sixplex held as one building without separate condominium titles generally sits outside the federal ban, which stops at three units, but a foreign entity buying it can still owe 25% NRST and, in Toronto, 10% MNRST unless exempt.
Will the NRST end when the foreign buyer ban ends?
No. The NRST and Toronto's MNRST have no scheduled end date. Only the federal ban is set to be repealed, on January 1, 2027.
Sources
- Non-Resident Speculation Tax, Ontario Ministry of Finance
- Non-Resident Speculation Tax exemptions, Ontario Ministry of Finance
- Non-Resident Speculation Tax rebates and refunds, Ontario Ministry of Finance
- Calculating Land Transfer Tax, Ontario Ministry of Finance
- Municipal Land Transfer Tax and Municipal Non-Resident Speculation Tax Rates and Fees, City of Toronto
- MLTT and MNRST Program Information, City of Toronto
- MLTT and MNRST Rebate Opportunities, City of Toronto
- Prohibition on the Purchase of Residential Property by Non-Canadians Act, Justice Laws Website, Government of Canada
- Prohibition on the Purchase of Residential Property by Non-Canadians Regulations (SOR/2022-250), Justice Laws Website, Government of Canada
- Budget Implementation Act, 2024, No. 1 (S.C. 2024, c. 17), Justice Laws Website, Government of Canada
- Government announces two-year extension to ban on foreign ownership of Canadian housing, Department of Finance Canada