The Ontario provincial government announced today the increasing of the Non-Resident Speculation Tax to 20%, and expanding the tax province-wide, in efforts to fight tax avoidance in the housing market. The tax will be effective on binding agreements to purchase and sales made on or after March 30.

Currently, the NRST — frequently referred to as a “foreign buyer’s tax” — is 15% and applies only to homes purchased within the Greater Golden Horseshoe Region (GGH) by foreign nationals, corporations, and taxable trustees. The province says that by upping the tax and widening its reach, it will dissuade speculative activity in the market from non-resident investors, thereby improving housing affordability for Ontario residents.

The recent changes make Ontario’s NRST the most comprehensive in Canada, and come as the province prepares to announce the next components of its housing supply action plan. Only newcomers who commit to living in the province long-term (applying to become a permanent resident or citizen within four years of their home purchase) will be eligible for NRST tax relief. New permanent residents of Canada — including foreign nationals studying and working in Ontario — and other eligible newcomers will be able to apply for rebates and other exemptions.

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