Ontario's Foreign Buyers Tax Bill—First Reading

Ontario's Foreign Buyers Tax Bill—First Reading

Bill 134 enacts a foreign buyers tax on Toronto-area housing.

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Bill 134 received first reading on May 17, 2017. This Ontario bill provides a 15% Non-Resident Speculation Tax on individuals who are not Canadian citizens or permanent residents of Canada and foreign corporations that purchase or acquire certain residential properties on or after April 21, 2017 in the "Greater Golden Horseshoe". Ontario first announced this tax on April 20, 2017. This tax is in addition to the regular land transfer tax that applies to the purchase of residential properties.

Generally, this new additional tax is payable where a foreign entity or a taxable trustee purchases or acquires designated land that is located within the Greater Golden Horseshoe. The Non-Resident Speculation Tax is 15% of the value of the consideration for the land. Designated land is generally land that contains at least one and not more than six single family residences. The Greater Golden Horseshoe includes Toronto, Hamilton, and Niagara among many other geographic areas surrounding Toronto.

 

The Non-Resident Speculation Tax would not apply when a person purchases or acquires property as:

  • A trustee of a mutual find trust 
  • A real estate investment trust 
  • A specified investment flow-through trust.

 

Ontario will introduce regulations to exempt the following individuals from the Non-Resident Speculation Tax:

  • Refugees 
  • Nominees under the Ontario Immigrant Nominee Program
  • Purchasers who jointly acquire the designated land with a spouse who is a Canadian citizen, permanent resident of Canada, refugee or nominee.

 

Further, rebates will be available for:

  • Homebuyers who obtain permanent residency within four years of purchasing or acquiring their home
  • Foreign nationals who work in Ontario for a continuous period of at least one year
  • International students enrolled in an approved institution for at least two years from the date of purchase or acquisition.

 

For more information, contact your KPMG adviser.

Information is current to May 23, 2017. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

© 2017 KPMG LLP, a Canada limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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