As part of its commitment to tackling the province's housing crisis by prioritizing Ontario families and homebuyers, the government is increasing the Non-Resident Speculation Tax (NRST) rate to 20 per cent. The new rules close loopholes to fight tax avoidance and expand the tax to apply province-wide. It went into effect on March 30, 2022.
Currently, the Non-Resident Speculation Tax rate is 15 per cent and only applies to homes purchased in the Greater Golden Horseshoe Region by foreign nationals, foreign corporations and taxable trustees.
Increasing the tax rate to 20 per cent and expanding the tax to apply province-wide will strengthen efforts to deter non-resident investors from speculating on Ontario’s housing market and help make homeownership more attainable for Ontario residents.
Rebates for new permanent residents of Canada and related exemptions will be available to eligible newcomers. This includes an opportunity for foreign nationals studying and working in Ontario who become permanent residents of Canada to apply for the rebate.
"Young families, seniors and workers are desperate for housing that meets their needs," said Peter Bethlenfalvy, Minister of Finance. "But a lack of supply and rising costs have put the dream of homeownership out of reach for too many families in the province."
Working with municipalities, the province is also considering a Vacant Home Tax, another tool to increase the housing supply. The authority for municipalities to implement such taxes exists in the Municipal Act. The City of Toronto introduced a Vacant Home tax, and several other municipalities, including Ottawa, are also preparing to implement similar taxes.
The Province will also establish a working group with municipal representatives to facilitate sharing of information and best practices.
The Town of Oakville and Halton Region cannot institute a Vacant Home Tax. Currently, Oakville's only option is to enforce the Property Standard and Lot Maintenance bylaws which allow town staff to maintain a property if it is in contravention of the bylaws. The town then issues a demand for payment from the property owner.
Ontario will also consult on potential measures to address concerns related to land speculation. For example, Ontario will explore ways to discourage construction slowdowns that may be artificially driving up prices of new homes for Ontario families through land speculation.
"Our government is taking action to bring homeownership within reach for more hardworking Ontario families, and I look forward to sharing our plan in the near future," said Steve Clark, Minister of Municipal Affairs and Housing.
"There is no silver bullet to solving the housing crisis. Addressing the housing supply crisis is a long-term strategy that requires long-term commitment and coordination with our partners and between all levels of government."
Building on the feedback received through the Ontario-Municipal Housing Summit and Rural Housing Roundtable, Ontario will continue to work with all levels of government to tackle the countrywide housing supply issues. The Province continues to call on the federal government to introduce further measures to complement Ontario’s approach and address foreign speculation in Canada’s real estate market.