This new tax, recently implemented by the Ontario Government, is a Non-Resident Speculation tax and is intended to tax people who are not residents of Canada but want to buy investment property here. It’s not meant to stop the investing, but it is meant to collect a tax from them. If it does slow down this type of purchase, then it means there will be more of a supply of homes for Canadian residents to choose from. I have read and listened to information from a couple of well-known and respected real estate lawyers in the past week trying to gain a bit of knowledge about this new tax. As a REALTOR, I don’t have any control over this 15% Non-Resident Speculation Tax, but I do have an obligation to my clients to have a working knowledge. If I believe it will be an issue for one of my clients, either directly or indirectly, I owe it to them to have a discussion about the implications and I will also refer them to their lawyer or the government so that they get the correct information.
Mark Weisleder, partner at Real Estate Lawyers.ca LLP, wrote a quick blog about this topic on May 7th, and he outlined the 5 main things to know.
- The tax is for NON-RESIDENTS of Canada who are buying residential property of 1-6 units ie: single family home, duplex, triplex, etc up to 6 units. Geographically it affects purchases in the Golden Horseshoe Region of Ontario, which is Toronto, Niagara, Hamilton, Peterborough, Simcoe County, Waterloo and York.
- Are you a Canadian Citizen but happen to be a non-resident? If this is the case then you are exempt from the tax. Being a Canadian Citizen is the key here.
- If there are more than one person on the purchase and therefore on title, and one or more are non-Canadian Citizens, then the entire purchase will be taxed at 15%.
- What if you are a student coming to Canada to learn and then work, get the appropriate paperwork done to become a permanent resident, but need Mom or Dad to co-sign the mortgage and Mom or Dad are non-residents? This is complicated and the tax may apply. I would highly recommend talking to your lawyer first!
- Will there be a rebate of the tax if you become a Canadian Citizen after your move into your new home? This is possible but I would recommend you check out the details with your lawyer or with the government directly.
I do know for sure that every real estate lawyer is now required to ask you for proof of citizenship and will record this information on a government mandated form. This is in addition to the information that lawyers, and REALTORS, already ask when we collect your ID for a home sale or purchase.
If you would like more information about the New Ontario 15% Non-Resident Speculation Tax, I would recommend contacting Mark Weisleder. You can reach him by phone at 1-888-876-5529 or by email at firstname.lastname@example.org.
John Weber, John@WeberTeam.ca or by cell at 705-727-6111
Christie Bond, Christie@WeberTeam.ca or by cell at 705-220-1152
Kelli Gastis, Kelli@WeberTeam.ca or by cell at 905-251-2651