Ontario’s foreign homebuyer tax explained
Who does it apply to and who is exempt?
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Who does it apply to and who is exempt?
TORONTO — A 15-per-cent non-resident speculation tax proposed by the Ontario government Thursday forms a key plank in the province’s plan to cool the hot housing market in its southern cities.
The tax specifically targets foreign speculators who purchase property in the Greater Golden Horseshoe — an area that stretches from the Niagara Region to Peterborough — to turn a quick profit rather than to find a place in which to live. Here’s a look at how the new tax would work.
A 15-per-cent tax will be applied to the purchase of a residential property in the Greater Golden Horseshoe area, in addition to the general land transfer tax. It will be retroactively effective as of Friday, once enabling legislation goes through.
The tax applies to buyers who are not Canadian citizens or permanent residents, non-Canadian corporations and taxable trustees for purchases of residential property in the Greater Golden Horseshoe area. That area includes the Greater Toronto Area, and surrounding regions such as Niagara, Waterloo, the counties of Haldimand, Brant, Wellington, Dufferin, Simcoe, Peterborough, Northumberland and the Kawartha Lakes area.
Non-Canadian corporations are defined as those: not incorporated in Canada; incorporated in the country but controlled by a foreign national or corporation and with no shares listed on a Canadian stock exchange; or controlled directly or indirectly by a foreign entity.
Taxable trustees are defined as either a foreign entity holding a title in trust for beneficiaries or a Canadian citizen, or a permanent resident, or a corporation holding a title in trust for foreign beneficiaries.
The tax applies to purchases of land containing between one and six single-family residences, including detached houses, semi-detached houses, townhouses and condos. It does not apply to multi-residential rental apartment buildings with more than six units, or agricultural, commercial or industrial land.
The tax will not apply to:
Rebates (with interest) will be granted to the following people if they either exclusively hold the property or hold it jointly with their spouse and it has been used as their principal residence:
The tax will apply to the value of the residential property. Land transfer tax affidavits or statements must specify if the non-resident speculation tax either does not apply, or does apply and has been paid to the Ministry of Finance.
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