Ontario: Non-resident speculation tax.

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Ontario: Non-resident speculation tax.


The Government of Ontario announces 15% Non-Resident Speculation Tax, expansion of rent control to cool the housing market. On April 20, 2017, the Government of Ontario announced various proposed measures under the banner “Ontario’s Fair Housing Plan” designed “to make housing more affordable for homebuyers and renters”.

Among the most significant of the proposed measures are:

  • the expansion of rent control to all private rental units in Ontario; and
  • the imposition of a Non-Resident Speculation Tax (NRST).

These two proposals are summarized immediately below, while some of the other announced measures are briefly noted at the end of this update.

Rent control

Prior to the proposed changes (which are to be effective as of April 20, 2017), the rent control provisions of the Residential Tenancies Act, 2006 did not apply to buildings that had not been occupied for residential purposes before November 1, 1991, including those built after that date. As noted above, the proposal is to extend rent control to all private rental units in Ontario, including those in buildings constructed after 1991. Few additional details have been provided.

Non-Resident Speculation Tax (NRST)


The proposed NRST is a 15% tax on the purchase or acquisition of land in the Greater Golden Horseshoe containing one to six single family residences by a “foreign entity” or “taxable trustee”. It is proposed that the NRST become effective April 21, 2017 but that “binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST”.


It is proposed that a “foreign entity” be defined as:

  • a “foreign national”, being an individual who is not a Canadian citizen or a permanent resident of Canada, or
  • a “foreign corporation”, being a corporation that:
  • is not incorporated in Canada;
  • is incorporated in Canada but is controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange; or
  • is controlled directly or indirectly by a foreign entity for the purposes of section 256 of the Income Tax Act (Canada).
  • It is proposed that “taxable trustee” be defined as a trustee that is one of the following:
  • a foreign entity holding title in trust for beneficiaries, or
  • a Canadian citizen, permanent resident of Canada, or a corporation holding title in trust for foreign entity beneficiaries.

The NRST is not proposed to apply to a transfer to a trustee of a mutual fund trust, real estate investment trust or specified investment flow-through trust.

The inclusion of entities “up the chain” of corporate ownership helps to explain a recent announcement by the Ministry of Finance regarding the collection of information about transferees of land containing one to six single family residences (as well as agricultural land), such as residency, citizenship, incorporation, corporate ownership and control and beneficial ownership of the land.

Of note, it is proposed that the NRST will apply to the full value of consideration of a transfer to multiple transferees even if only one of the transferees is a foreign entity or taxable trustee, and, further, that the other transferees in those circumstances will be jointly and severally liable for the NRST notwithstanding that they are not foreign entities or taxable trustees.

Exemptions are proposed for some foreign nationals, such as refugees, and rebates are proposed, subject to eligibility requirements, for persons who become citizens or permanent residents within four years of the transfer, foreign nationals working in Ontario and international students.


The Greater Golden Horseshoe includes the following geographic areas: Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York.


As noted, the NRST is proposed to apply to transfers of land containing one to six single family residences in the Greater Golden Horseshoe. The concept of single family residences is a familiar one in the world of Land Transfer Tax (LTT), as it defines a category of land (that containing one or two single family residences) that is subject to an additional bracket and LTT rate for higher-value transactions. Of note, the materials published by the Ministry of Finance on the NRST state that a transfer of multiple condominium units will be treated as separate transfers of land, each unit being considered land containing one single family residence. The effect would seem to be that a transfer of more than six condominium units (or even all of the units in a condominium building) would be subject to the NRST even though, for example, the transfer of a residential apartment building containing more than six single family residential units would not be subject to the tax.
Other measures

The Government’s April 20, 2017 announcement also included the following proposals, among others:

  • amendments to the Residential Tenancies Act, 2006 including the introduction of a standard form of lease and tightening of provisions for “landlord’s own use” evictions.
  • introduction of legislation to allow the City of Toronto and possibly other municipalities to impose a vacant homes property tax (also hinted at in the types of information to be collected by the Ministry of Finance referred to above, which includes whether the property is intended to be occupied by the purchaser or family as their principal residence and whether the property is intended to be leased out).
  • rebates of development charges to encourage the construction of new rental apartment buildings.

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