The Foreign Buyer Tax Is 35% in Toronto, Not 25%
If you are not a Canadian citizen or permanent resident and you buy a home in Toronto, the tax on
that purchase is 35 percent. Not 25. Thirty-five.
That number catches people badly, because most of what is written about Ontario’s foreign buyer
tax was written before the second one existed.
There are two taxes, not one
The provincial one. Ontario’s Non-Resident Speculation Tax has been 25 percent
since October 25, 2022, and it applies to residential property anywhere in Ontario, not just
the Greater Golden Horseshoe. That geographic expansion is another thing older articles get wrong.
The Toronto one. City Council adopted a Municipal Non-Resident Speculation Tax in
February 2024, and it took effect on January 1, 2025. It is a further 10 percent on the purchase
price for foreign buyers of residential property in Toronto, on top of the provincial tax and on top
of the Municipal Land Transfer Tax that every Toronto buyer pays.
On a $1,000,000 Toronto home bought by a foreign buyer, the two speculation taxes alone come to
roughly $350,000. That is before provincial land transfer tax, before Toronto’s municipal land
transfer tax, and before legal fees. Buy the identical house in Markham or Vaughan and the
speculation tax is $250,000, because the municipal one is a Toronto tax.
Who it does not apply to
Ontario publishes specific exemptions. An exemption means you do not pay at closing at all, which
is a different and better thing than paying and applying for a refund later.
- Nominees under the Ontario Immigrant Nominee Program
- Protected persons, which includes people with refugee status
- Spouses of a Canadian citizen, permanent resident, nominee or protected
person, purchasing together
The tax also does not apply to land containing more than six single family residences, or to
agricultural, commercial or industrial land. Toronto’s municipal tax is aimed at residential
properties containing one to six units, including condominiums.
A great deal of what is published about this says you must become a permanent resident within 180 days to get the tax back. Ontario’s own page says the Permanent Resident rebate may be available where the transferee becomes a permanent resident of Canada within four years of the date the conveyance is registered. Four years is a completely different plan from six months. There are separate deadlines for actually filing the rebate application once you qualify, and those are strict, so the practical advice is unchanged: put it in front of a lawyer early. But do not let a wrong 180 day figure talk you out of a purchase that qualifies.
A newer rebate most people have not heard of
Ontario added a rebate where a residential property is repurposed for industrial use, available
for conveyances on or after November 6, 2025. It is narrow and it will not apply to a family buying a
house, but if you are looking at a property with a change of use in mind it is worth knowing it
exists.
What actually goes wrong
In my experience the problems are almost never about the rate. They are about status on the
closing date.
- Status changes between offer and closing. Whether the tax applies is
determined at registration, not at the time you sign. If a permanent residence application is in
progress, the timing of your closing date is a financial decision, not an administrative one. - Buying with a spouse or family member. The structure of who is on title
changes the answer. This must be decided before the offer, with a lawyer, not fixed afterwards. - Assuming it is Toronto-only, or Golden Horseshoe-only. The provincial tax is
province-wide now. The municipal one is Toronto only. Getting those backwards costs six figures. - Nobody asking the question at all. The tax is collected on registration. It is
not a bill that arrives later that you can plan for.
Before you write an offer, tell your real estate lawyer your exact status and your spouse’s
exact status, and ask them in writing whether NRST and MNRST apply. That conversation costs very
little and is the only reliable protection against a six figure surprise on closing day.
Rates, exemptions and rebate conditions change, and they changed twice in recent years. Confirm
the current position on Ontario’s own Non-Resident Speculation Tax page and the City of Toronto’s
MNRST page, and get a real estate lawyer involved before you sign anything.
Where This Comes From
Written from Ontario’s Non-Resident Speculation Tax pages on ontario.ca and the City of Toronto’s Municipal Non-Resident Speculation Tax material. Rates and exemptions have changed more than once, so confirm the current position before relying on it.
Frequently Asked Questions
How much is the foreign buyer tax in Toronto?
Does the Non-Resident Speculation Tax apply outside the Greater Golden Horseshoe?
Can I get the foreign buyer tax back?
Who is exempt from the Non-Resident Speculation Tax?
Does the tax apply if I become a permanent resident before closing?
Related Reading
- Closing Costs in Ontario
- The Toronto Vacant Home Tax Trap for Buyers
- First-Time Home Buyer Guide
- Leaving Canada? Moving to the U.S. With Real Estate
If your status or your spouse’s status makes this a live question, get it in front of a real estate lawyer before you write an offer. I am happy to recommend people who deal with this regularly, and to help you think about whether the municipal line matters to where you buy.