New Municipal Non-Resident Speculation Tax in Toronto: What Foreign Buyers Need to Know

Effective January 1, 2025, the City of Toronto has implemented a Municipal Non-Resident Speculation Tax (MNRST) at a rate of 10% on the purchase price of certain residential properties acquired by foreign buyers. This tax is in addition to the existing Municipal Land Transfer Tax (MLTT) and the provincial Non-Resident Speculation Tax (NRST).

Who Is Affected?

The MNRST applies to foreign nationals who purchase or acquire certain types of residential properties in Toronto. Aimed at enhancing housing affordability, this new tax imposes stricter regulations on foreign ownership of real estate. It also applies retroactively to foreign nationals who purchased preconstruction properties in previous years and are now approaching their closing date.

Are Rebates Available?

In limited circumstances, rebates from the MNRST are available, mirroring the NRST rebate framework:

• The foreign national must become a permanent resident of Canada within four years of the purchase date.

• The rebate application must be submitted within 90 days of becoming a permanent resident.

• The foreign national must own the property exclusively, or jointly with a spouse only.

• The property must have been used as the principal residence of the foreign national (and their spouse, if applicable) continuously up to the time of the refund application.

Important: MNRST rebates are not available for international students or foreign nationals working in Ontario, even though these groups may have previously qualified for NRST rebates. 

Planning Ahead: What Foreign Buyers Should Do

If you are a non-resident considering a property purchase in Toronto, we strongly encourage you to seek legal guidance before entering into an Agreement of Purchase and Sale. Understanding the implications of the MNRST, including potential eligibility for rebates and applicable timelines, is essential to avoid unexpected liabilities.

How We Can Help

Our firm provides legal support to both current and prospective property owners affected by the MNRST. Whether you are applying for a rebate, structuring a property purchase, or seeking clarity on your obligations, we are here to help. Contact us today to schedule a consultation and ensure your interests are protected in this evolving legal landscape.

Written by Kyra Kim