The possibility of increasing the tax on the purchase of housing for foreign buyers

Foreign buyers who want to buy a home in Toronto may soon face a hefty tax if the city council approves a new tax. Foreigners will have to pay 10% more to buy a residential property from January 2025.

According to the relevant report, the main goal of MNRST is to protect and increase the supply of housing and maintain the affordable level of housing prices in the real estate market by discouraging foreign buyers from purchasing property in the city of Toronto.

The report noted that this municipal tax is similar to the NRST, which was implemented in 2017 and charges foreign buyers a tax equal to 25 per cent of the purchase price of certain properties across Ontario. MNRST tax does not apply to apartment buildings with more than six units, agricultural land, commercial land or industrial land.

Exemptions are available for foreign nationals who entered under the Ontario Provincial Nominee Program, as well as protected persons, including refugees. Properties jointly purchased by a foreign national and a spouse who is a Canadian citizen, permanent resident, refugee or provincial nominee are also exempt from this tax.

The province of Ontario previously offered special discounts for international students and foreign nationals working in Ontario, but these were phased out in 2022 and are therefore not included in the municipal policy.

Members of the municipal executive committee will discuss the report at their next meeting on January 30.

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