In the dynamic landscape of Ontario’s real estate market, recent regulations targeting non-resident buyers have emerged as a crucial topic of discussion. This blog delves into the intricacies of these regulations, focusing on the Non-Resident Speculation Tax (NRST) and the Foreign Buyer Ban, shedding light on their implications and significance for both the market and potential property buyers.

Land Transfer Tax Issues

Non-Resident Speculation Tax (NRST)

As of October 25, 2022, the NRST has taken center stage, showcasing a substantial increase in its rate to 25 percent. This tax applies to the acquisition of residential properties across Ontario by foreign nationals, foreign corporations, or taxable trustees. Essentially, if you are not a Canadian citizen or permanent resident, this tax comes into play. The NRST targets designated land, which typically consists of properties with up to six single-family residences.

One crucial point to note is that the NRST operates alongside the general Land Transfer Tax (LTT) in Ontario, adding an additional layer of financial consideration.

Exemptions in the NRST

Navigating the NRST realm, some individuals find exemption under specific circumstances:

Trustees of certain trusts, including mutual fund trusts and real estate investment trusts (REITs).
Protected persons under the Immigration and Refugee Protection Act (Canada).
Nominees under the Ontario Immigrant Nominee Program.
Buyers jointly acquiring property with a Canadian citizen, permanent resident, protected person, or nominee spouse.
Foreign nationals becoming permanent residents within four years of property acquisition, with applicable conditions.

Foreign Buyer Ban

Prohibition on the Purchase of Residential Property by Non-Canadians Act

In a significant stride toward curbing speculation and promoting affordability, the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into effect on January 1, 2023. This Act effectively prohibits non-Canadians from purchasing residential properties with three dwelling units or less for a period of two years. This prohibition stems from concerns regarding the role of foreign investment in soaring property prices, potentially exacerbating housing affordability issues.

Definition of “Non-Canadian”

The Act extends its scope to individuals who are not Canadian citizens, permanent residents, or registered under the Indian Act. Additionally, the prohibition extends to corporations and entities controlled by non-Canadians, provided they are not publicly traded or listed on a Canadian stock exchange.

Exemptions Contained in the Act and Regulations

The Act and its regulations offer several exceptions, catering to specific groups:

Temporary residents studying in Canada who meet certain conditions.
Temporary residents working in Canada under specified conditions.
Refugees, refugee claimants, and individuals fleeing international crises who meet certain criteria.
Accredited members of foreign missions in Canada.
Non-Canadian spouses and partners purchasing with eligible buyers.
Section 35 Rights – Indigenous People and Communities.
Exceptions for certain types of property located outside Census Metropolitan Areas.


The recent regulations are poised to redefine the landscape of residential property acquisition in Ontario. By introducing the NRST and the Foreign Buyer Ban, the provincial government aims to curtail speculative foreign investment, enhance housing affordability, and promote sustainable growth in the real estate market. These measures are testament to the evolving dynamics of property ownership and the government’s commitment to creating a balanced and thriving housing sector.

At RBHF Professional Corporation, we understand that navigating these regulations can be intricate. Our dedicated team is here to provide you with informed guidance and tailored solutions as you navigate the evolving landscape of Ontario’s real estate market. Contact us today to learn more about how these regulations might impact you or to explore strategies that align with your property goals.

Categories: Real Estate Lawyer