Earlier this year, a series of measures were implemented by the Ontario government to "cool-off" what the provincial government deemed to be soaring house prices across the Greater Golden Horseshoe Region of Ontario, which include the Greater Toronto Area. One of these is a Non-Resident Speculation Tax (“NRST”).

So, what is the NRST? Essentially, the NRST is a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) and taxable trustees. The NRST applies in addition to the general land transfer tax in Ontario. Residential property includes detached houses, semi-detached houses, townhouses and condominium units.

Let's take an example: A friend of mine, “Jane,” is considering buying a condominium in downtown Toronto for her daughter who is in her 2nd year of university. They are from China and her daughter is enrolled in full time studies as an international student. She heard about the new 15% NRST but is not sure how it will affect her. She has additional restrictions for cash transfers based on her citizenship, so the situation is more complicated than just adding the NRST.

In general, the NRST tax will apply to the purchase, but there are specific details that could affect the application of the tax or possibility for rebate of the tax. I told Jane she needed to talk to a lawyer who had worked with Chinese citizens purchasing property in Toronto before.

This FAQ from the Ontario government provides a good overview as well as answering common questions. As always, you should consult expert advice before making any decisions — in this case, contact a Real Estate lawyer with experience in this area.