Foreign Buyer Tax in Canada

Foreign investment is generally excellent for the economy; however, it can amplify volatility in critical sectors like housing. Following intense localized surges in offshore capital after 2016, British Columbia and Ontario introduced targeted provincial taxes to cool overheating markets in Vancouver and Toronto. Years later, an unprecedented nationwide pandemic housing bubble pushed affordability to the forefront of national policy, triggering an even more sweeping federal response.

Today, Canada manages non-resident real estate activity through a strict, multi-layered framework of bans and surcharges:

• The Federal Level: Under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, the federal government bans most foreign buyers from purchasing residential real estate in urban centers entirely until January 1, 2027.
• The Provincial & Municipal Level: Where a purchase is legally permitted via specific federal exemptions, heavy non-resident taxes apply at closing. This includes Ontario's 25% Non-Resident Speculation Tax (NRST), a 10% municipal tax in Toronto (for a combined 35% tax), and a 20% additional property transfer tax in designated regions of British Columbia.
• The East Coast Surcharge: Meanwhile, Nova Scotia levies a 10% Non-Resident Deed Transfer Tax on the higher of the purchase price or assessed value. This applies to any buyer who does not primarily reside in the province—meaning it hits both international buyers and out-of-province Canadians alike.

Continue reading to learn how the federal ban affects your eligibility to buy, exactly where provincial taxes apply, and how you may qualify for specific exemptions or tax rebates.

In Canada, a foreign buyer tax operates as a land transfer tax surcharge paid at closing. Rather than being based on where the money comes from, it is triggered strictly by the legal residency status of the individuals or entities acquiring the property. Where an international purchaser qualifies under a federal exemption to buy a home, these provincial and municipal surcharges are added to standard closing costs.

The application of non-resident taxes depends on how ownership is structured on the property title:

• Non-Citizens & Non-Permanent Residents: The tax applies to any individual who does not hold Canadian citizenship or Permanent Resident (PR) status at the time of closing.
• The "Any Purchaser" Joint-Title Rule: Surcharges apply to the entire value of the transaction if any single purchaser on the title is a foreign national. Even if a foreign national buys a home jointly with a Canadian citizen or PR, the full tax rate is typically triggered on the entire purchase price.
• Foreign & Foreign-Controlled Corporations: The tax applies to all entities incorporated outside of Canada. Additionally, any Canadian corporation that is directly or indirectly controlled by foreign nationals or foreign entities must pay the tax.

In Ontario, the Non-Resident Speculation Tax (NRST) is a 25% tax on residential property purchased anywhere in the province. The tax applies to non-citizens and non-permanent residents of Canada who are buying a house in Ontario. Previously, this tax was 15% and only applied to residential property located in the Greater Golden Horseshoe Region (GGH). Effective March 30, 2022, the NRST was increased to 20% and is now effective province-wide. Effective October 25, 2022, the NRST was increased further to 25%.

While Ontario's 25% Non-Resident Speculation Tax is broad, the province grants specific exemptions at the time of closing for foreign nationals who fall into one of the following legal categories:

• Provincial Nominees: Foreign nationals nominated under the Ontario Immigrant Nominee Program (OINP) at the time of the purchase, provided they certify that they intend to apply for Canadian permanent residency.
• Protected Persons: Foreign nationals who have been granted official refugee status or protection under the federal Immigration and Refugee Protection Act.
• Spouses: A foreign national who purchases a home jointly with a spouse who is a Canadian citizen, permanent resident, qualifying provincial nominee, or protected person.

The 60-Day Occupancy Rule: To legally qualify for any of the exemptions above, the purchaser must occupy the property as their principal residence within 60 days of the transfer being registered.

The NRST exemption rules are strictly applied. If a property is purchased by multiple people, every single buyer on the title must meet an exemption criteria, or the exemption is completely lost.

For example, if a home is purchased jointly by three people:

• A Canadian citizen,
• Their foreign national spouse (who qualifies for the spousal exemption), and
• A third-party family member or business partner who is a foreign national and does not qualify for any exemption.

Because the third party is non-exempt, the spousal exemption is voided. The full 25% NRST must be paid on 100% of the property's total purchase price, regardless of how ownership percentages are split on the deed.

Following major provincial overhauls, the historical rebate streams for international students and foreign workers have been discontinued for all recent purchases. Today, there is only one primary path to a tax rebate for foreign nationals:

• Permanent Resident Rebate: A foreign national who paid the 25% NRST can apply for a full refund of the tax if they become a permanent resident of Canada within four years of the property's purchase (acquisition) date.
• Key Conditions for the Rebate: The purchaser must own the property alone or with their spouse only, and must occupy it as their principal residence starting within 60 days of registration. The application must be filed within 180 days of becoming a permanent resident (only one spouse needs to qualify if both are on the title). Note this deadline runs from your PR date, not your closing date.

NRST applies to the transfer of "designated land" with one to six residential units. Multi-residential buildings with more than six units and specific types of land do not qualify for NRST.

If purchasing a residential plus commercial property, the NRST is applied only to the residential portion of the property.

Ontario’s Non-Resident Speculation Tax applies province-wide. Prior to March 30, 2022, the NRST in Ontario was only effective in the Greater Golden Horseshoe Region (GGH).

British Columbia requires foreign entities and taxable trustees to pay an additional property transfer tax of 20% of the property’s fair market value (FMV) when purchasing a property in some specific regions. The tax's proceeds are invested in affordable housing initiatives within the province.

The tax applies only to the residential portion of a property. Meanwhile, the tax is only applicable to the proportionate share of the foreign entity. For example, if a foreign entity acquires 30% interest in a residential property, the tax will apply only to that 30% of the property’s fair market value.

You can be exempted from the additional tax if:

• You are exempted from paying property transfer tax.
• You are a B.C. Provincial Nominee.
• You are acquiring the property on behalf of a Canadian-controlled limited partnership.

If you have paid the foreign buyer tax, you may be able to get a refund of the same under the following conditions:

• You become a Canadian citizen or permanent resident within one year of the property transfer being registered with the Land Title’s Office. To qualify, you must also move into the home within 92 days of the property transfer registration and use the home as your primary residence for at least one year.
• The tax was paid in error, for example, you qualified for an exemption but did not claim it.

You can apply for a refund using the additional property transfer tax refund application form.

Beyond the 20% tax paid at closing, foreign nationals who own residential property in BC's designated urban zones (including Metro Vancouver, the Capital Regional District, and dozens of interior municipalities) are subject to an annual vacancy tax if the property is not rented out or occupied otherwise.

The rates penalize foreign equity heavily:

• Foreign Owners & Satellite Families: Must pay an annual tax of 3.0% (4% for 2027 tax year) of the property's BC Assessment value. (A satellite family is an individual or spousal unit where more than 50% of their total worldwide income goes unreported on a Canadian tax return).
• Canadian Citizens & Permanent Residents: Pay a lower rate of 1.0% if the home is left vacant or underutilized.

Taxable regions for the foreign buyer tax in BC are:

• Capital Regional District
• Fraser Valley Regional District
• Metro Vancouver Regional District
• Regional District of Central Okanagan
• Regional District of Nanaimo

Nova Scotia's Provincial Deed Transfer Tax (PDTT) is based strictly on provincial residency rather than citizenship. As a result, Canadian citizens and permanent residents who live in another province must pay this tax when buying a home in Nova Scotia, alongside international buyers.

• April 1, 2022: The tax was originally introduced at a rate of 5%.
• April 1, 2025: The provincial government officially doubled the rate to 10% for all Agreements of Purchase and Sale signed on or after this date.

The tax is calculated using the 10% rate applied to the higher of the purchase price or the property's assessed value. When navigating this tax, keep the following core rules in mind:

• Property Restrictions: The 10% tax applies strictly to residential properties containing three dwelling units or fewer, as well as vacant land intended for residential use.
• Proportional Application: The tax is only calculated on the specific percentage of ownership interest being transferred to the non-resident. If a Nova Scotia resident and an out-of-province buyer purchase a home together, the 10% rate applies only to the non-resident's portion of the title.
• The 6-Month Relocation Exemption: Individual buyers are exempt from the tax if they move to the province and establish permanent residency within six months of the closing date. To secure this exemption, buyers must complete a formal Proof of Residency form and provide supporting documentation (such as updated utility bills or a Nova Scotia health card) within the required timeline.

Overall, the foreign buyer taxes are designed to keep housing affordable for Canadian residents. By decreasing foreign investor demand in certain hotspots, provinces and cities can prevent the cost of real estate from skyrocketing. However, each province has different exemptions and rebates/credits available to offset the tax.

Yes, you will still need to pay the land transfer tax. The land transfer applies to the original purchase price before adding the NRST.

Ontario’s NRST is effective province-wide. Prior to March 30, 2022, only these areas were subject to Ontario’s Non-Resident Speculation Tax:

• City of Barrie
• County of Brant
• City of Brantford
• County of Dufferin
• Regional Municipality of Durham
• City of Guelph
• Haldimand County
• Regional Municipality of Halton
• City of Hamilton
• City of Kawartha Lakes
• Regional Municipality of Niagara
• County of Northumberland
• City of Orillia
• Regional Municipality of Peel
• City of Peterborough
• County of Peterborough
• County of Simcoe
• City of Toronto
• Regional Municipality of Waterloo
• County of Wellington, and
• Regional Municipality of York.

The term ‘satellite family’ usually refers to untaxed worldwide earners whose household income not taxed in Canada is more than that taxed in Canada. This is usually the case where one of the spouses is living in Canada and has a lesser income than the spouse living outside Canada.