As expected, Ontario has announced that effective April, 21, 2017, a new tax of 15% will be payable on the purchase or acquisition of residential property located in specified parts of Ontario by non-resident individuals, foreign corporations and certain taxable trustees. The new Non-Resident Speculation Tax (NRST) is part of several measures to address strong demand for housing in Ontario, including changes to rent controls as well as allowing municipalities to consider imposing additional taxes (for example, a vacant homes property tax). The NRST would apply in addition to Ontario’s land transfer tax.
While the NRST will be effective as of April 21, 2017, it will not apply to binding agreements of purchase and sale signed on or before April 20, 2017. The NRST will also not apply to transfers of multi-residential rental apartment buildings, agricultural land or commercial/industrial land.
Please contact your Lipton adviser if you would like to discuss any of these changes further.