The Non-Resident Speculation Tax (NRST) is a provincial tax in Ontario that targets foreign homebuyers. It was first introduced in 2017 at 15% for properties in the Greater Golden Horseshoe region and has since expanded to a 25% tax province-wide on applicable residential real estate transactions. This guide provides an up-to-date explainer on Ontario’s NRST as of 2025 – including the current 25% rate, who exactly has to pay it, recent rule changes (like the March 27, 2024 amendments), definitions of key terms (such as “foreign entity” and “taxable trustee”), available exemptions, and transitional rules.
What is the NRST and When Does It Apply?
The NRST is essentially an additional land transfer tax that Ontario charges when a foreign buyer purchases residential property. It applies on top of the regular Ontario land transfer tax. In practical terms, this means if a property purchase meets the NRST criteria, the foreign buyer (or anyone buying with them) must pay an extra 25% tax on the value of the home at closing.
The tax applies to purchases of “designated land” – which currently means any land containing at least one and no more than six single-family residences. This covers typical homes like detached houses, semi-detached, townhouses, and condo units. (It does not apply to large multi-unit buildings with more than six units, nor to purely commercial, industrial, or agricultural land.) Most ordinary home purchases fall under “designated land” definition, so if the buyer is a foreign non-resident, NRST is likely in play.
Who Really Pays NRST: Foreign Entity and Taxable Trustee Defined
It’s crucial to understand the definitions of “foreign entity” and “taxable trustee” because they determine who is on the hook for NRST. In Ontario’s terms, a foreign entity includes two main groups:
- Foreign national:
- An individual who is not a Canadian citizen or a permanent resident of Canada. This is defined by reference to Canada’s immigration laws – essentially anyone who hasn’t obtained citizenship or PR status.
- Foreign corporation:
- A corporation incorporated outside Canada, or a corporation controlled by a foreign national or another foreign corporation. In other words, even a company incorporated in Ontario could be deemed a “foreign” corporation if foreign persons ultimately own or control it beyond certain thresholds.
Meanwhile, a “taxable trustee” means any trustee of a trust where either: (a) at least one trustee is a foreign entity; or (b) at least one beneficiary of the trust is a foreign entity. This prevents use of trusts to bypass the tax – if a foreign party has interest in the trust, the NRST will still apply.
Why do these definitions matter? Because if any purchaser in the transaction meets one of those definitions, the NRST applies to the entire transaction. Ontario’s rule is all-or-nothing: even a partial foreign ownership triggers the tax on the full value. All buyers, foreign or not, become jointly liable to pay it at closing. For example, suppose a foreign buyer and a Canadian spouse purchase a house together – even though one spouse is Canadian, the presence of the foreign spouse means NRST is charged on the whole purchase price (though as we’ll see, this particular scenario might qualify for an exemption). The key takeaway is that “who really pays” is anyone involved in a purchase with a foreign party – it’s not limited only to the foreign buyer. Thus, Canadian family members or business partners who co-buy with a foreign national must be aware of the NRST implications.
2025 NRST Rate: 25% Province-Wide (with Transitional Rules)
As of 2025, the NRST rate is 25% across all of Ontario. This rate has been in effect since late 2022 and continues in 2025. However, there are transitional rules to accommodate agreements signed before certain key dates. If you entered a binding purchase agreement before the NRST rate increased or expanded, you might qualify for a lower rate or an exemption when you close. The current transitional provisions are as follows:
- 25% NRST – This is the default rate for any purchase where the agreement of purchase and sale was signed after October 24, 2022 (and the buyer is a foreign entity or taxable trustee). Most current transactions fall in this category.
- 20% NRST – If the agreement was entered into during the window after Ontario’s first expansion but before the further increase (specifically, after March 29, 2022 and on or before October 24, 2022), then a 20% rate applies. This reflects the period when Ontario had expanded NRST province-wide at 20% before later hiking it to 25%.
- 15% NRST – If the agreement of purchase and sale was signed on or before March 29, 2022 and the property is in the Greater Golden Horseshoe (the originally targeted region), the rate remains 15%. This covers deals made under the old rules prior to the tax’s expansion province wide.
- 0% (No NRST) – If you entered into a contract very early, before the NRST existed or expanded to your area, you may owe no NRST at all under transitional grace. For example, a purchase of land in the Greater Golden Horseshoe agreed before April 21, 2017 (when NRST was first introduced) isn’t subject to NRST, and similarly a purchase outside the GGH agreed on or before March 29, 2022 is not subject to NRST (since the tax didn’t cover the rest of Ontario until after that date).
These transitional rules mean that the timing of your purchase agreement can affect the tax rate. However, if any assignment or change occurs that adds a foreign buyer who wasn’t part of the original agreement, the highest rate (25%) will generally apply regardless of earlier dates.
Exemptions: Who Doesn’t Have to Pay the NRST?
Ontario provides a few major exemptions where a transaction involving a foreign national will not require NRST at closing. These exemptions are based on the buyer’s immigration status or relationship at the time of purchase, and they come with specific conditions. The primary NRST exemptions are:
- Nominee Program Exemption: The buyer is a foreign national who has been nominated under the Ontario Immigrant Nominee Program (OINP) and has applied (or certifies they will apply) for permanent residence status. Essentially, if someone is well on their way to becoming a Canadian permanent resident through Ontario’s nominee program, they can be exempt from NRST. They must intend to become a PR before their nominee certificate expires.
- Protected Person (Refugee) Exemption: The buyer is a foreign national with protected person status (i.e. a refugee who has been granted protection under Canadian law). Refugees in Canada are exempt from NRST on a home purchase as a recognition of their unique status.
- Spousal Exemption: The foreign buyer is purchasing the property jointly with their spouse, and that spouse is a Canadian citizen, Canadian permanent resident, OINP nominee, or protected person. In other words, if a non-Canadian marries a Canadian (or an exempt nominee/refugee) and they buy a home together, the NRST can be waived – provided both spouses are on title and buying together. (Each spouse must be listed as a transferee in the deed for this to apply.)
In all the above cases, additional conditions apply. Crucially, every other co-owner in the deal must also be a Canadian citizen, PR, nominee or protected person (or the spouse of one) – you can’t, say, have a foreign nominee team up with another foreign friend and claim an exemption; the only foreign party allowed in an exempt deal is the one qualifying under these categories. Also, all the buyers must certify an intention to occupy the property as their principal residence. In fact, under new rules effective 2024, they must not only intend to occupy but actually occupy the home within 60 days of the transfer. This occupancy requirement ensures these exemptions are only used for genuine end-users of homes (living in them), not passive investors.
If an exemption applies, it must be properly claimed at the time of closing/registration by filing the required statements through Ontario’s electronic land registration system (Teraview). It’s important to inform your real estate lawyer early if you believe you qualify for an NRST exemption, so they can prepare the paperwork.
NRST Rebates: Getting a Refund After Paying
What if you paid the NRST at purchase, but later change your status? Ontario has rebate programs that allow certain buyers to get a refund of the NRST they paid, if they meet specific criteria within a set timeframe after the purchase. The most common scenario is a foreign buyer who later becomes a Canadian permanent resident. Here’s how the rebate system works as of 2025:
- Permanent Resident Rebate: A foreign national who pays NRST and then becomes a Canadian permanent resident within 4 years of the purchase may be eligible for a full rebate of the tax. To qualify, the property must be owned (from the time of purchase) either solely by that individual or jointly with their spouse only, and the property must be occupied as their principal residence (starting within 60 days of closing and continued until the rebate is claimed). This ensures the rebate is for people who genuinely settle in Canada and make the home their primary residence. If a foreign buyer and their spouse jointly own the home, the rebate becomes available as soon as either one of them becomes a permanent resident (meeting all other conditions).
- Former Student/Worker Rebates (legacy cases): In the past, Ontario also offered rebates if a foreign buyer studied full-time in Ontario for at least two years or worked full-time in Ontario for a year after purchasing. However, for purchases on or after March 30, 2022, those specific student and worker rebates are no longer offered – the province narrowed the incentive to focus only on those who become permanent residents. The older rebates still exist to cover transactions from prior years (e.g. if an international student bought in 2021 and meets the criteria, they can apply), but any home bought in recent years relies on the PR route for a refund.
To claim a rebate, an application with supporting documents (proof of PR status, etc.) must be submitted to the Ontario Ministry of Finance. The Ontario government extended the application deadline – now you have 180 days from the day you become a permanent resident to apply for the NRST rebate. This was formerly 90 days, so the change gives new Canadians more time to gather paperwork and file. It’s advisable to start the rebate process as soon as you qualify, and ensure continuous compliance with the residency and ownership conditions until the rebate is approved.
What Changed in 2024? – New Amendments Effective March 27, 2024
Ontario’s 2024 Budget introduced a few updates to the NRST rules, effective March 27, 2024, aimed at closing loopholes and clarifying requirements. Here are the key “what’s new” changes to be aware of:
- Parking and Storage Units Now Taxable:
- The definition of “designated land” was expanded to include certain property that previously escaped NRST. Now, a standalone purchase of a parking space or storage locker in a condo building is subject to NRST (if the buyer is a foreign entity). Before this change, if a foreign buyer bought just a parking spot or locker (without also buying a residential unit in that building at the same time), it wasn’t taxed, because such units weren’t considered “residential land” on their own. As of March 27, 2024, those condo accessory units count as designated land for NRST purposes. Transitional note: if you signed an agreement to buy a parking or storage unit before March 27, 2024, the old rule can still apply (no NRST on that deal), but any new agreements after that date will incur the tax if the buyer is foreign. This change prevents foreign speculators from parking money in standalone condo storage or parking spots as a way around the tax.
- 60-Day Occupancy Requirement for Exemptions:
- As mentioned earlier, Ontario tightened the rules for those exemptions (Nominee, Refugee, Spouse). Now, buyers who claim an NRST exemption must actually move into the home as their principal residence within 60 days of the transfer. Previously, the law just required an intention to use it as a principal residence, with no firm deadline. The new 60-day rule creates a clear, short timeline to ensure the property is occupied by the buyer right away. If an exempt buyer fails to occupy within 60 days, they could be found ineligible for the exemption.
- Other Technical Clarifications:
- The 2024 amendments included a few clarifications in the law’s wording – for example, specifying that whether someone is considered a spouse for NRST purposes is determined as of the date the property transfer is registered (closing date). Another clarification is that if a purchase is made by a “taxable trustee” (a trust scenario), none of the above exemptions or rebates can be claimed for that deal. These tweaks were made to close ambiguities and ensure the rules function as intended.
Overall, the March 2024 changes reinforced the principle that NRST is meant for active foreign purchasers of homes – tightening any loopholes and ensuring genuine home occupiers (and future Canadians) have paths to avoid or recover the tax, while purely speculative or indirect purchases by foreign interests are captured by the tax.
Final Thoughts
Ontario’s Non-Resident Speculation Tax in 2025 remains a major factor for any foreign individual eyeing property in the province. The 25% tax is a steep additional cost, but some buyers can recoup it – especially those on the path to becoming Canadians. Keeping up with rule changes (like the 2024 tweaks) is important, as is understanding how the NRST works alongside federal policies. If you’re unsure about your situation under the NRST or the foreign buyer ban, it’s wise to seek professional advice to ensure you comply with all requirements and take advantage of any relief.
Isabel Caguioa is a Toronto tax lawyer at Taxpayer Law who specializes in Non-Resident Speculation Tax (NRST) refund applications. Reach out today to learn how Isabel can help you.
