Buying or selling in Ontario as a non resident.
Non residents face three extra layers on an Ontario closing. The 25 percent Non Resident Speculation Tax, the federal ban on residential purchases by non Canadians, and withholding tax when a non resident sells. Khan Law clears all three.
Book a 15 minute callThe 25 percent speculation tax
A foreign national, foreign corporation, or taxable trustee who buys residential property in Ontario pays the Non Resident Speculation Tax at 25 percent of the price. On an 800,000 home that is 200,000 on top of the regular land transfer tax. A rebate exists for buyers who become permanent residents within four years.
The federal ban on purchases by non Canadians
The Prohibition on the Purchase of Residential Property by Non Canadians Act runs to January 1, 2027. It blocks most direct and indirect residential purchases by non Canadians, with narrow exceptions for some work permit holders, students, and refugees. Khan Law confirms eligibility before you sign.
Withholding tax when a non resident sells
When a non resident sells Canadian real estate, the Income Tax Act requires a clearance certificate under Section 116. Until it issues, the buyer must withhold 25 percent of the sale price and remit it to the Canada Revenue Agency. Khan Law coordinates the certificate so the seller is not left short at closing.
Important considerations
- NRST is due at registration, not after closing. Budget for it with your down payment.
- Buying through a corporation or trust does not avoid the ban or the tax. The rules look through the structure.
- Section 116 clearance can take several weeks. Start early so the sale does not stall.
Frequently asked
Can a non resident buy residential property in Ontario right now?
Most residential property is blocked until January 1, 2027 under the federal ban, though commercial property and some exceptions remain open. Khan Law confirms your eligibility before you commit.
Is the speculation tax refundable?
A rebate is available if the buyer becomes a permanent resident within four years and meets the occupancy conditions. Khan Law files the rebate when you qualify.
How much does the buyer withhold when I sell?
Twenty five percent of the gross sale price for most residential property, held until the Section 116 clearance certificate issues from the Canada Revenue Agency.