How To Avoid Foreign Buyer Tax Ontario?

by | Feb 6, 2026 | legal guidance | 0 comments

A title page about how to avoid foreign buyer tax Ontario.

Foreign buyer tax Ontario, also called the non-resident speculation tax (NRST), is a provincial charge that applies to foreign nationals. Along with the land transfer tax (LTT), it can significantly increase your total house closing costs. This may make you wonder if there’s a way to avoid this tax.

Fortunately, the government of Canada has provided some relief options for non-residents regarding the foreign buyer tax. If you wish to learn more about how to avoid foreign buyer tax, continue reading.

What Is The Foreign Buyer Tax?

The foreign buyer tax is a residential property tax that was implemented by the Ontario government in 2017. When non-residents purchase a residential property or acquire an interest in a house, they’re expected to pay the foreign buyer tax.

In 2025, the rate of the NRST is 25% of the total property value. This means if you’re buying a property of $1,000,000, the foreign buyer tax will be 25% of $1,000,000. If you find the calculation confusing, you can seek assistance from a Scarborough real estate lawyer.

A skilled attorney, such as Barnett Law, can use the latest NRST rate and calculation formula to determine your payable foreign buyer tax. We can also help you comprehend eligible exemptions under the Ontario Land Transfer Tax Act.

Can You Avoid Foreign Buyer Tax Ontario?

Yes, you can avoid the foreign buyer tax in Ontario partially or completely. The government of Canada has included some exemptions from the NRST to offer relief to eligible non-residents.

General Land Transfer Tax exemptions also apply to the foreign buyer tax because both taxes are governed under the same property act. If you’re exempt from LTT, you will not be expected to pay the NRST.

Three exemptions that apply to the land transfer tax and foreign buyer tax Ontario.

How To Avoid Foreign Buyer Tax Ontario?

Multiple foreign buyer tax exemptions exist in Ontario, including:

1. Spousal Exemption Ontario Foreign Buyer Tax Exemption

Foreign buyers whose spouses are Canadian citizens don’t need to pay the non-resident speculation tax (NRST). To qualify for the foreign buyer tax exemption, ensure you and your spouse are listed as joint transferees on the property title.

Both of you must certify that you’ll use the space as your primary residence within 60 days of property registration. Your spouse must also have active Canadian citizenship or permanent residency status (expired permits will not count) on the house closing day.

Despite the law, newly married couples may not be eligible for the spousal foreign buyer tax exemption. The definition of a spouse for the land transfer tax and non-resident speculation tax includes:

  • Two people who have been married to each other continuously for no less than three years
  • Two people who are not married to each other, but have continuously cohabitated for no less than three years
  • Two people who may or may not be married to each other, but have a relationship permanence, such as being parents to a child

You must meet the definition of spouse under the NRST and the eligibility criteria of spousal exemption when applying for the foreign buyer tax exemption under this category. Consulting a real estate lawyer can help navigate the law, check if you meet the eligibility criteria, and file for exemption.

2. Nominee Ontario Foreign Buyer Tax Exemption

The Provincial Nominee Program (PNP) is for immigrants who wish to achieve permanent residency (PR) status in Canada. “Students, business people, and semi-skilled or skilled workers” can be nominated under the program, allowing them to study or work in the country. 

When applying for the PNP exemption in Scarborough, you must meet the following eligibility criteria:

  • Ensure you’re nominated under the Ontario Immigrant Nominee Program
  • Certify that you’ll be applying for PR status in Canada before your nomination expires
  • Confirm that you’ll be occupying the property as your primary home within 60 days of the house closing

Fulfilling all three points allows you to apply for a non-resident speculation tax exemption as a nominee. If your spouse is a nominee, besides the earlier criteria, an additional point will apply: both of you must be listed on the title deed as the transferees for the spousal nominee exemption.

3. Protected Person Ontario Foreign Buyer Tax Exemption

You may be able to enjoy an exemption from the foreign buyer tax in Ontario if you’re a protected person or the spouse of a protected person in Canada. A protected person is someone with refugee protection under the Immigration and Refugee Protection Act.

If your spouse has protected person status, you must purchase the house as joint property. Their name must be listed on the title deed along with yours for the NRST exemption. You and your partner must also certify that you’ll be using the house as your primary residence within two months of registration.

Keep in mind that the protected person status should be active on the day of the house purchase. If you or your spouse receives the status after buying the property, the tax exemption will not apply. A refund or rebate also does not apply in such cases.

Eligibility criteria for exemption of foreign buyer tax Ontario for refugees.

4. NRST Rebate And Refund

People who have already paid the non-residential speculation tax may be eligible for a complete rebate or partial refund. The former option will be available to you if you become a permanent resident in Canada. To qualify for the foreign buyer tax rebate, you must ensure:

  • The property you bought is within the Greater Golden Horseshoe Region of Ontario
  • The sale agreement was signed on or before 29th March 2022, and the transferee title has not been assigned to someone else since then

You can also seek a foreign buyer tax refund if you overpaid the amount or the charge was calculated incorrectly. A Scarborough real estate lawyer can assess your NRST calculation and help determine if you paid the right amount. 

Barnett Law can also submit a foreign buyer tax refund application on the Ministry of Finance’s online portal for you. The authority will oversee the request and refund the excess amount if you overpaid the NRST.

FAQs

How Much Is Foreign Buyer’s Tax In Ontario?

The foreign buyer’s tax rate for 2025 is fixed at 25% of the total property value. Let’s imagine you recently bought a house for $2,000,000. The NRST will be $500,000 (25% of $2,000,000).

Who Pays Foreign Buyer Tax Ontario?

The foreign buyer tax is paid by foreign nationals in Canada. These include people who are neither Canadian citizens nor permanent residents. Foreign corporations are also required to pay the non-resident speculation tax.

What Is Foreign Buyer Tax Rebate?

The foreign buyer tax rebate is a return of a properly paid tax upon meeting the eligibility criteria. You can submit an NRST rebate application if you became a permanent resident of Canada after the house purchase. This request must not be submitted any later than 180 days after you gained PR status.

Do Permanent Residency Applicants Have To Pay Foreign Buyer Tax?

Yes, foreign nationals who have applied for permanent residency must pay the non-resident speculation tax. If your PR status is approved before the house closing, you will be exempt from the foreign buyer tax. However, if the approval comes after paying the tax, you can apply for the NRST rebate.

Apply For Ontario Foreign Buyer Tax Exemptions With Barnett Law

Navigating the foreign buyer tax exemptions in Ontario can be challenging due to complex calculations and strict eligibility criteria. Legal support by Barnett Law can help you understand the non-resident speculation tax laws and file for exemptions. Contact us today to speak to one of our real estate lawyers to learn more about the foreign buyer tax in Scarborough.

Author Profile

Barnett Law
Barnett Law
Barnett Law is a trusted and knowledgeable lawyer in Scarborough. Her expertise spans real estate law, family law, adoptions and fertility law. A lawyer by profession and a humanitarian by heart, Athena Narsingh Barnett wants to help people become more familiar with the legal system and be well-informed to make important legal decisions.