NOF, CAP, APS, NRST…the abbreviations can be a lot if you are new to the Toronto real estate game. My name is Britt Huggins and I’m a Toronto real estate agent on the SO&Co. team here to break down what does the term NRST mean and how does it affect buyers?
If you don’t know what in the alphabet soup this means, you are not alone. Some of our recent clients who are buying with us, who were relocating from the States, just got the crash course on what this stands for and how it applies. I thought I would share it with you to increase your knowledge in the field, should these letters apply to you!
NRST stands for Non-Resident Speculation Tax (also known as the Foreign Buyer’s Tax). Quite simply, it’s a tax that is applied upon closing to non-residents of Ontario, wishing to purchase a home within the provincial borders. This tax, previously set at 20% has recently jumped to 25% existing to reduce foreign investors from driving up an already competitive market, and to keep housing affordable for Canadians.
This means, in Ontario, as of October 25th, 2022– if a foreign buyer makes a purchase of $1,000,000 value, an additional $250,000 will be added due to the taxation.
It is important to note that this tax is applicable to the transfer of designated land, including one and not exceeding six single family dwellings (think semi’s, detached, town homes and condos), however this is NOT the commonly known land transfer tax, this is in ADDITION to it.
Who does this affect, you ask? Any individual parties who are not Canadian citizens or permanent residents and any companies with foreign ownership. Exemptions are made for Nominees (foreign nationals nominated under the Ontario Immigrant Nominee Program, Protected Persons (foreign nationals with refugee status), and Spouses (foreign nationals married to Canadians.)
If a trust or corporation purchasing land has any foreign purchasers on the title, the property will still be subject to this tax regardless if any of the members are in fact Canadian. Canadian corporations controlled by foreign nationals are also subject to this taxation in Ontario.
If you are curious if this tax may be applicable to you, feel free to reach out to myself, Brittany Huggins, for more information. I’m happy to help answer any specific questions you may have. In the meantime, keep scrolling searching those listing websites, add a few hot properties to your wish list and let’s see if we can make some of those wishes come true.
Stay warm out there!