The City of Toronto has released a comprehensive housing blueprint to assist more than 341,000 households over the next decade.

The HousingTO 2020-2030 Action Plan provides 13 strategic actions that looks to address the “full continuum” of housing – including homelessness, social housing, rental housing, long-term care, and home ownership. Some of the highlights include a revised housing charter and the creation of a multi-sector land bank to support the approval of 40,000 new rental and supportive homes.

Implementation of the full plan over 10 years is estimated to cost governments $23.4 billion, with the city’s commitment through current and future investments being $8.5 billion.

Mayor John Torry said that he “will be working hard with the other orders of government to ensure the entire HousingTO Action Plan is fully funded”

“This has to be a priority — we have to come together to support households who are struggling to pay the rent and keep, or put a roof over their heads,” said Torry. “Ensuring that residents in our city have access to housing will benefit our entire city. It gives people the opportunity to meet their full potential and to participate in our city’s success. Together we can make a difference and make Toronto a place that anyone who wants to, can call home.”

The Toronto housing market continued to rebound in September, with prices rising the most in 21 months, bringing the cost of a typical home close to the record high set in 2017.

The benchmark price across all types of homes rose 5.2 per cent from a year earlier to $805,500, the highest annual rate of growth since December 2017. That’s about $10,000 short of the record set more than two years ago when soaring prices prompted a series of government policy changes to cool the market. Prices were driven higher by a decline in supply, with active listings down 14 per cent to 17,254.

Sales in the Toronto region jumped 22 per cent to 7,825 units from the same period last year, the Toronto Real Estate Board said Thursday. All housing segments saw double-digit gains, led by a 29 per cent sales jump for detached homes. Sales were well below the record set in September 2016 of more than 9,800, and on a seasonally-adjusted basis, sales fell 0.3 per cent from August.

The average price of a home in Toronto rose 5.8 per cent to $843,115, the highest price this year, though well below the peak of almost $921,000 set in April 2017.

Demand for homes in Canada’s biggest city continues to grow amid lower interest rates and a crunch in supply thanks to strong immigration flows. Buyers have also adjusted to stricter mortgage-lending rules put in place to cool the market. Sales in Vancouver rebounded 46 per cent last month after a policy-driven slump, though prices continue to dip.

 

When real estate agent Ben Caballero achieved verified home sales of 3,556 it earned him a place in the record books.
But last year, Caballero did what many thought impossible by beating his own record by 67%, selling an eyewatering 5,801 homes through the MLS in just one year.
The total number of homes sold by the HomesUSA.com broker/owner from Dallas, TX, in 2018 meant that he has been reconfirmed by Guinness World Records as the current holder of title ‘Most annual home sales transactions through MLS by an individual sell side real estate agent – current.’
As a former builder, Caballero specializes in selling new homes via his platform for more than 60 builders in Dallas-Fort Worth, Houston, Austin, and San Antonio.
“Being honored by Guinness World Records for a second time is twice as nice,” said Ben Caballero. “Achieving the first Guinness World Records title was the honor of a lifetime. Breaking my own record is, well, indescribable.”
His total annual home sales exceed $1 billion for the first time in 2015, a feat he repeated until last year, when he became the first real estate agent to exceed $2 billion in total home sales.

The Harvey Kalles sales representative has been an agent for 15 years. In 2017, Kutyan was contacted by the The Globe and Mail and asked how he was able to get multiple offers on a home in mid-town Toronto. This was after the introduction of the Ontario Fair Housing Plan, when he had been the Canadian media’s go-to real estate prognosticator. Now, he’s been quoted in the Globe and Mail and the Toronto Star multiple times.
Since Kutyan always makes it his business to know what’s going on in Toronto’s housing market and tell the public about it, he seemed like a natural fit for this week’s question.

What is the three-to-five-year outlook for real estate sales in Toronto and the GTA? What are the top 5 trends?

It really depends what type of real estate you’re looking at. Are we talking about detached homes, condominiums, townhomes or semi-detached and what area of the city are you looking at? My answer is going to vary depending on what I’m looking at.

Ultimately, I think the long-term outlook for any real estate sales in the city is going to be upward. We’re in a growing metropolis that looks more and more attractive on the world stage considering what’s going on with our neighbours to the south and what’s happening with the UK and Brexit. On the world stage, Canada and Toronto specifically are very attractive. Ontario brings in 110,000 permanent residents per year and most of them move into the GTA, so in the next seven or eight years we’ll have another million people living in Toronto.

Now, not all these people are buying one million, two million or three million dollar homes, but it puts upward pressure on demand so if supply is limited then it’s a simple math equation where prices will go up.

In the short-term, we’re going to see some fluctuation and that depends on the type of property and the location. There’s a real shortage in mid-town Toronto for properties between $800,000 and $1.2 million where I’ll get multiple offers. I’ll get four to five thousand hits on the listing in five to seven days. I’ll have two hundred plus people through in a week and I’ll end up with ten or twelve offers with property selling for significantly over my asking price.

But then in certain areas of the city, like Bayview, York Mills and Willowdale, there’s a lot of inventory on the market. If I look in Bayview and York Mills at prices between three to six million dollars for detached two-storey homes on 50 to 70-foot lots, there are 86 homes on the market right now. If I look at the number of homes that have sold over the course of six months and divide by the number of months it comes out to 2.83 sales per month, which means there is almost 31 months worth of inventory still on the market in those areas.

Most of the price growth in Toronto has been in condominiums because the majority of the buyers are not in the million plus range, so if you look at the $500,000 to $800,000, that’s where most of the buyers are. What can you buy at that price point? It’s going to be condos. There have been price increases on those for sure. As for trends, here are my main ones:

Shortage of large condos

The other flip side I’m seeing with the condo market is the high-end or the larger units have real lack of inventory in central Toronto.

What’s happening is there’s a big cohort of baby boomers who are looking to downsize, but there’s no one to sell them to. There are only a handful of buildings in Toronto that have fairly large units and they’re few and far between. I’m seeing multiple offers and big prices I haven’t seen before on these units because of the demand.

The problem is the homes they’re selling have gone down in price, while the condos they want to buy have gone up.

Boomers staying in homes longer creates housing shortage for millennial buyers

The gap is widening between what they’re leaving and what they’re looking to buy, so what’s happening is a lot of these people are holding on to their homes longer than they should.

Their house may be under used for their needs, but unless they have to move due to health they’re not going anywhere, which creates a housing shortage in certain areas for millennial buyers.

More long-term renters

As a result, young buyers will have to change their outlook on what home ownership is going to be for them. There’s the age old rent versus own conversation. This generation is used to living in freehold homes within the city, but that may change.

People might look at renting more now and if you look at Canada in general, we have one of the highest percentage home ownership rates in the western world, but it’s something ingrained in our mentality to be home owners. But this might change. People may shift to being permanent renters and focus on putting the rest of their money elsewhere.

Buyers owning homes outside Toronto means increased dependency on public transit

If people are going to own something, they’re going to have to change what their view of that is going to be.

We’re all used to growing up in freehold homes in suburban Toronto or within Toronto, but since income has not kept up with the way pricing has gone, if people want to live in the city, it’s not going to be in a freehold house it’s going to be in a condo or some kind of multi-residential home like a duplex or townhome.

If they want to live in a house, they will have to live in the suburbs and when I say suburbs, I’m not talking about Scarborough and Etobicoke. I’m talking about Oshawa, Ajax, Burlington, Hamilton and Barrie. They’re going to use GO Transit and other forms of public transit to commute into the city and work at even greater numbers than they already do.

Laneway housing

The city has allowed for laneway housing now and I think that’s going to be something we’re going to see more and more of moving forward. There are hundreds of kilometres of unused laneways in Toronto, so why not use them?

There are companies here in Toronto that are specifically geared towards building and getting approval for laneway housing. What you’re going to see is either someone is going to put in a laneway home to augment their income or subsidize their mortgage or because they need more space.

Perhaps they need a studio space, an apartment for a parent they need to take care of or a space for an adult child to live at home. This is going to be a big trend and I have clients now who are specifically only looking for houses on lanes. These are investor clients who are looking to do something.

Global institutions are increasing their allocations to commercial real estate assets as confidence in the sector remains high.

The appetite for CRE investment among the world’s largest investors has reached a 7-year high despite concerns about asset valuations and weakening economic growth.

The annual Real Estate Allocations Monitor from Hodes Weill & Associates and Cornell University’s Baker Program in Real Estate, shows that institutions’ view of CRE from a risk-return standpoint increased from 5.1 to 5.7, reflecting that returns have exceeded return targets.

“Globally, we’re in a yield-starved environment, and real estate has proven to be one of the few asset classes where investors can still find yield without exposure to excessive risk,” said Douglas Weill, Managing Partner at Hodes Weill & Associates. “This is the primary reason why we’re seeing a flight to safety in real estate. However, there remains a significant amount of dry powder on the sidelines as good investments become harder to find – which could explain why institutions remain meaningfully under-invested relative to target allocations.”

Target allocations increase
Target allocations to CRE gained 10 basis points to 10.5% this year and implies the potential for an additional US$80 to US$120 billion of capital to be allocated to real estate over the coming years.

While there is some evidence that growth in allocations appears to be moderating, the report still forecasts a further 10 basis point rise in 2020, driven by institutions in the Americas and Asia Pacific.

Real estate is an important and growing allocation in institutional portfolios,” said Dustin Baker, Director of the Baker Program in Real Estate at Cornell University. “Despite concerns about late-cycle risk, real estate fundamentals – including supply and demand trends – remain broadly favorable. This has been driving strong returns, which in turn is contributing to continued liquidity in the asset class.”

The buoyant economic conditions in Toronto mean more people moving to the city for work and wanting the most affordable housing options.

This has helped the condo apartment sales market in the third quarter, which gained 11.1% year-over-year according to new figures from the Toronto Real Estate Board.

TREB members reported 6,407 condo apartment sales through the MLS in Q3 while listings eased by 1% to 9,538.

“As economic conditions continue to be favourable for job growth in the Greater Toronto Area, people have continued to come to the city for work. Home ownership is important to many Canadians, and, as a relatively affordable housing option, condos in the GTA offer prospective buyers the chance to achieve their dreams of owning property,” said TREB president Michael Collins.

The tightening market put upward pressure on prices with the average price of a condominium apartment rising 5.8% to $584,564; although in the city of Toronto, which accounts for 70% of sales, the rise was slightly lower at 5.6% ($628,074).

Keeping up with demand
TREB says there are still concerns about supply as the market gathers pace; CMHC data for August shows completions of condo apartments was down year-to-date compared to last year, which may have curbed investor purchases.

“Condominium apartments are obviously a popular choice amongst first-time homebuyers. Moreover, it is also important to remember that condominium apartments owned by investors represent a huge component of the GTA rental stock and certainly account for most additions to the rental stock, on net, over the past decade. With this in mind, a well-supplied condo segment will be important moving forward to ensure that we can keep up with population growth driven by a strong and diverse regional economy,” said Jason Mercer, TREB’s Chief Market Analyst.

The guideline is the maximum a landlord can increase most tenants’ rent during a year without the approval of the Landlord and Tenant Board.

Rent increase guideline for 2020

The rent increase guideline is 2.2% for increases between January 1 and December 31, 2020.

Who it applies to

The guideline applies to most private residential rental units covered by the Residential Tenancies Act.

The guideline does not apply to:

  • vacant residential units
  • social housing units
  • nursing homes
  • commercial properties

This guideline also does not apply to new buildings, additions to existing buildings and most new basement apartments that are occupied for the first time for residential purposes after November 15, 2018.

When can rent be increased

In most cases, the rent for a unit can be increased 12 months after:

  • the last rent increase
  • a tenant first moves in

A tenant must be given written notice of a rent increase at least 90 days before it takes effect.

How the guideline is calculated

It is calculated using the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Data from June to May is used to determine the guideline for the following year.

A sample calculation

Your monthly rent was increased to $1,000 on June 1, 2019. The guideline for 2020 is 2.2%. Therefore:

  • an increase of 2.2% on $1,000 = $22.00
  • $1,000 + $22.00 = $1,022.00

Your landlord could lawfully increase your rent payment 12 months later on June 1, 2020 up to $1,022.00 per month

Your landlord would need to provide you written notice at least 90 days before June 1, 2020.

Previous rent increase guidelines

The chart below illustrates yearly rent increases, in Ontario, from 1991 to 2019.

Overview

The NRST is a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region (GGH) by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) and taxable trustees.

The NRST applies in addition to the general LTT in Ontario.

The GGH includes the following geographic areas:

  • 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.

Refer to the map and the FAQs at the end of this page for more information.

Effective date

The NRST took effect April 21, 2017.

Binding agreements of purchase and sale signed on or before April 20, 2017, and not assigned to another person after April 20, 2017, are not subject to the NRST.

Entities subject to the NRST

The NRST applies to foreign entities or taxable trustees who purchase or acquire residential property in the GGH.

A foreign entity is either a foreign corporation or a foreign national.

A foreign corporation is a corporation that is one of the following:

  1. A corporation that is not incorporated in Canada.
  2. A corporation, the shares of which are not listed on a stock exchange in Canada, that is incorporated in Canada and is controlled, directly or indirectly in any manner whatever, within the meaning of section 256 of the Income Tax Act (Canada), by one or more of the following:
  • a foreign national
  • a corporation that is not incorporated in Canada
  • a corporation that would, if each share of the corporation’s capital stock that is owned by a foreign national or by a corporation described in paragraph 1 were owned by a particular person, be controlled, directly or indirectly in any manner whatsoever, within the meaning of section 256 of the Income Tax Act (Canada), by the particular person.

A foreign national, as defined in the Immigration and Refugee Protection Act (Canada), is an individual who is not a Canadian citizen or permanent resident of Canada.

A permanent resident means a person who has acquired permanent resident status and has not subsequently lost that status under section 46 of the Immigration and Refugee Protection Act (Canada).

A taxable trustee means a trustee of:

  • a trust with at least one trustee that is a foreign entity, or
  • a trust with no foreign entity trustees if a beneficiary of the trust is a foreign entity.

Taxable trustee does not include a trustee acting for the following types of trusts:

  1. A mutual fund trust within the meaning of subsection 132 (6) of the Income Tax Act (Canada).
  2. A real estate investment trust as defined in subsection 122.1 (1) of the Income Tax Act (Canada).
  3. A SIFT trust as defined in subsection 122.1 (1) of the Income Tax Act (Canada).

Types of property subject to the NRST

The NRST applies to the transfer of land which contains at least one and not more than six single family residences. Examples of land containing one single family residence include land containing a detached house, a semi‑detached house, a townhouse or a condominium unit. In a situation involving the purchase of multiple condominium units, each unit would be considered land containing one single family residence. Examples of land containing more than one single family residence that are subject to the tax include land containing duplexes, triplexes, fourplexes, fiveplexes and sixplexes.

The NRST does not apply to other types of land such as land containing multi‑residential rental apartment buildings with more than six units, agricultural land, commercial land or industrial land.

The NRST applies on the value of the consideration for the residential property. If the land transferred includes both residential property and another type of property, the NRST applies on the portion of the value of the consideration attributable to the residential property. For example, if the purchase price of the transaction is $1,000,000 and contains one single family residence with a value of the consideration of $400,000, and commercial land with a value of the consideration of $600,000, the 15 per cent NRST would apply to only the $400,000 portion.

General application

The 15 per cent NRST applies to the value of the consideration for a transfer of residential property if any one of the transferees is a foreign entity or taxable trustee.

For example, if a transfer of residential property is made to four transferees, one of whom is a foreign entity that acquires a 25 per cent share in the land, the NRST would apply to 100 per cent of the value of the consideration for the transfer.

Each transferee is jointly and severally liable for any NRST payable. If a foreign entity or taxable trustee does not pay the NRST, the other transferees will be required to pay the tax. This applies even if the other transferees are Canadian citizens or permanent residents of Canada.

The NRST does not apply when a person purchases or acquires residential property as a trustee of a mutual fund trust, real estate investment trust or specified investment flow‑through trust.

The NRST applies to unregistered dispositions of a beneficial interest in residential property. This includes purchases and acquisitions of residential property where section 3 of the Land Transfer Tax Act is applicable.

Exemptions

An exemption from the NRST may be available in the following situations:

  • Nominee – A foreign national who is nominated under the Ontario Immigrant Nominee Program (nominee) at the time of the purchase or acquisition, and the foreign national has applied or certifies that they will apply to become a permanent resident of Canada
  • Protected person – A foreign national on whom refugee protection is conferred (protected person) under section 95 of the Immigration and Refugee Protection Act (Canada) at the time of the purchase or acquisition, or
  • Spouse – A foreign national who jointly purchases residential property with a spouse, who is a Canadian citizen, permanent resident of Canada, nominee or protected person.
    Under the Land Transfer Tax Act, spouse means “spouse” as defined in section 29 of the Family Law Act. This includes either of two persons who are married to each other, or who are not married to each other and who have cohabited,
  1. continuously for a period of not less than three years, or
  2. in a relationship of some permanence, if they are the natural or adoptive parents of a child.

To qualify for an exemption, the foreign national (and if applicable their spouse) must certify they will occupy the property as their principal residence.

The exemption applies if the Canadian citizen, permanent resident of Canada, nominee or protected person and his or her foreign national spouse purchased the property with other individuals who are Canadian citizens, permanent residents of Canada, nominees, or protected persons.

For the spousal exemption, multiple spousal units may also hold title, so long as one spouse is a Canadian citizen, permanent resident of Canada, nominee or protected person.

All transferees in the conveyance must also certify that they will occupy the property as their principal residence.

However, the exemption does not apply if the Canadian citizen, permanent resident of Canada, nominee, or protected person and his or her foreign national spouse purchased the property with another foreign national who is not a nominee or protected person. For example, if three parties purchase a property as follows:

  • one Canadian citizen and his or her foreign national spouse, and
  • a third party who is a foreign national (other than a nominee or protected person),

the exemption would not apply and NRST would be payable.

Exemptions in the Act and its regulations that apply to LTT will also apply to the NRST. The deferral and cancellation of LTT for intercorporate transfers between affiliated corporations will also apply to the NRST.

 

Rebates

A rebate of the NRST may be available in the following situations:

  • Foreign national who becomes a permanent resident of Canada – The foreign national becomes a permanent resident of Canada within four years of the date of the purchase or acquisition
  • International student – The foreign national is a student who has been enrolled full-time for a continuous period of at least two years from the date of purchase or acquisition in an “approved institution” (under section 8 of Ontario Regulation 70/17 of the Ministry of Training, Colleges, and Universities Act) at a campus located in Ontario. Full-time means enrolled in at least 60 per cent (if the individual does not have a disability) or 40 per cent (if the individual has a disability) of what the approved institution considers to be a full course load for the academic year, or
  • Foreign national working in Ontario – The foreign national has legally worked full-time under a valid work permit in Ontario for a continuous period of at least one year since the date of purchase or acquisition. Full-time means an employment position that requires no fewer than 30 hours of paid work per week over a 12 month period and no fewer than a total of 1,560 hours of paid work over that period.
    To qualify for a rebate, the foreign national must exclusively hold the property, or hold the property exclusively with his or her spouse. The property must also have been occupied as the foreign national’s (and if applicable his or her spouse’s) principal residence for the duration of the period that begins within 60 days after the date of the purchase or acquisition.

Rebates must be applied for within four years after the day on which the NRST became payable, except for the rebate for a foreign national who becomes a permanent resident of Canada. The rebate for a foreign national who becomes a permanent resident of Canada must be applied for within 90 days of the foreign national becoming a permanent resident, and no application may be made more than four years and 90 days from the date the NRST became payable.

All rebate applications must be made using the Ontario Land Transfer Tax Refund/Rebate form for NRST.

Supporting documentation will be required to substantiate all applications for rebates.

Overpayment of NRST

If NRST has been improperly paid or overpaid, a refund may be applied for using the Ontario Land Transfer Tax Refund/Rebate form for NRST.

Supporting documentation will be required to substantiate all applications for refunds.

Tax avoidance and offences

All transfers of land in Ontario are subject to audit.

Anti‑avoidance provisions will be enforced to ensure the NRST is reported and paid as required. This includes examining circumstances where Canadian citizens or permanent residents of Canada, as taxable trustees, hold property in trust for a foreign entity. This also includes preventing the use of multiple conveyances to avoid the NRST.

Failure to pay the NRST as required may result in a penalty, fine and/or imprisonment.

Interest

NRST interest is compounded daily and interest rates are reset every 3 months.

Current interest rates (October 1, 2019 to December 31, 2019):

  • 7% on the NRST you owe to the Ministry of Finance
  • 1% on rebates of the NRST you are eligible for, including as a result of a successful appeal or objection
  • 1% on refunds of the NRST you are eligible for, including as a result of a successful appeal or objection
  • 4% on refunds you are eligible for as a result of a successful appeal or objection from an assessment of the NRST (under section 12 of the Land Transfer Tax Act)

Interest begins to accrue 40 business days after a complete NRST rebate or refund application is received by the Ministry of Finance to the date the rebate or refund is paid.

Note: Interest on a refund as a result of a successful objection or appeal from an assessment of the NRST will be consistent with the general LTT refunds.

Statements regarding NRST at registration

The Ministry of Finance requires an express statement of whether or not a registration is subject to NRST.

Electronic registration (Teraview) – NRST is payable
Effective December 16, 2017, if NRST is payable, statement 9170 must be selected, along with either statement 9171 or statement 9172. The NRST statements are found on the Explanations Tab.

  • 9170 – The transferee(s) has considered the definitions of “designated land” “foreign corporation” “foreign entity”, “foreign national” “specified region”, “taxable trustee” as set out in subsection 1(1) of the Land Transfer Tax Act, and declare one of the following statements:
  • 9171 – This conveyance is subject to additional tax as set out in subsection 2(2.1) of the Act.
  • 9172 – This conveyance is subject to additional tax as set out in subsection 2(2.1) of the Act. This is a conveyance of a combination of “designated land” and land that is not designated land. The transferee(s) has accordingly apportioned the value of the consideration on the basis that the consideration attributable to the conveyance of the designated land is AMOUNT and the remainder of land is used for TEXT purposes.

Electronic registration – NRST is not payable

Effective December 16, 2017, if a registration is not subject to NRST, statement 9173 must be selected, along with one of statements 9174 through 9181.

  • 9173 – The transferee(s) has read and considered the definitions of “designated land” “foreign corporation” “foreign entity”, “foreign national” “specified region”, “taxable trustee” as set out in subsection 1(1) of the Land Transfer Tax Act. The transferee(s) declare that this conveyance is not subject to additional tax as set out in subsection 2(2.1) of the Act because:
  • 9174 – (a) This is not a conveyance of land that is located within the “specified region”.
  • 9175 – (b) This is not a conveyance of “designated land”.
  • 9176 – (c) The transferee(s) is not a “foreign entity” or a “taxable trustee”.
  • 9177 – (d) Subsection 2.1(3) of the Act applies to this conveyance (the land has been conveyed pursuant to an agreement of purchase and sale entered into on or before April 20, 2017, and any assignment of the agreement of purchase and sale to any other person was entered into on or before April 20, 2017).
  • 9178 – (e) Subsection 2.1(4) of the Act applies to this conveyance in that the land is being conveyed to a “nominee” as defined in Ontario Regulation 182/17 and the conveyance satisfies the requirements of section 2 of the Regulation.
  • 9179 – (f) Subsection 2.1(4) of the Act applies to this conveyance in that the land is being conveyed to a “protected person” as defined in Ontario Regulation 182/17 and the conveyance satisfies the requirements of section 3 of the Regulation.
  • 9180 – (g) Subsection 2.1(4) of the Act applies to this conveyance in that the land is being conveyed to a “foreign national” and the foreign national’s “spouse” as defined in subsection 1(1) of the Act, and the conveyance satisfies the requirements of section 4 of the Regulation.
  • 9181 – (h) OTHER [insert text].

If a transferee wants to provide more than one reason as to why NRST is not payable on registration, the transferee may use 9181 and insert the applicable paragraphs, for example:

  • 9181 – (h) OTHER “paragraphs (a), (b) and (c) apply”.

Paper registration

Effective December 16, 2017, the Ministry of Finance requires an express statement of whether or not the registration is subject to NRST. The Land Transfer Tax Affidavit has been amended to accommodate the appropriate statements at paragraph 5. If NRST is payable, paragraph 5(a) must be completed. If NRST is not payable, paragraph 5(b) must be completed.

Unregistered dispositions

The Ministry of Finance requires an express statement of whether or not the disposition is subject to NRST. The Return on the Acquisition of a Beneficial Interest in Land form has been amended to accommodate the appropriate statements at section 10. If NRST is payable, section 10(a) must be completed. If NRST is not payable, section 10(b) must be completed.

Payment of NRST

Electronic registrations
After December 29, 2017, Teraview will accept payments of NRST at the time of registration.

Until December 29, 2017, affected purchasers/transferees must pre‑pay both the LTT and the NRST directly to the Ministry of Finance (MOF). Once the MOF accepts the pre‑payment of the taxes, the transfer may be registered electronically without further payment of LTT or NRST.

The MOF will provide a letter confirming receipt of NRST and LTT with a receipt number.

The MOF will not accept payment of the City of Toronto’s municipal land transfer tax. Please contact the City of Toronto about payment of its municipal land transfer tax.

Registrations made at Land Registry Offices (registration on paper)
Land Registry Offices will not accept payment of NRST. For registrations made at a Land Registry Office, if the transfer is subject to NRST, both the LTT and NRST must be pre‑paid directly to the MOF.

The MOF will provide a letter confirming receipt of NRST and LTT with a receipt number.

Dispositions / unregistered transfers

If a transfer will not be registered on title, a Return on the Acquisition of a Beneficial Interest in Land form, along with the payment of the LTT and the NRST must be submitted to the MOF within 30 days of the transfer of land.

How to pre‑pay the Land Transfer Tax and the NRST to the MOF

After December 29, 2017, the Ministry of Finance will continue to accept payment of NRST in advance of registration. Taxpayers who wish to pay NRST directly to the Ministry must also directly pay the applicable LTT to the Ministry.

Registrants who receive Ministry of Finance pre-approval of NRST liability must still complete the applicable NRST statements along with either statement 9089 or statement 9090:

  • 9089 – Tax has been paid directly to the Ministry of Finance and documents endorsed accordingly as confirmed by receipt no. NUMBER (evidence needs to be submitted).
  • 9090 – Ministry of Finance has endorsed documents as follows: “No Land Transfer Tax Payable” (evidence needs to be submitted).

If the conveyance is subject to NRST, registrants must complete statements 9089, 9170 and [9171 or 9172]. Registrants will receive a receipt number for insertion into statement 9089.

If the conveyance is not subject to NRST, registrants must complete either statement 9089 or 9090 along with 9173 and one of statements 9174 through 9181.

The Ministry of Finance suggests submitting all required documents a minimum of five business days prior to the closing of the deal. Please note that this guideline only applies if the ministry is provided with all required documents (properly completed) and payments at the time of submission. In addition, complex files (such as those involving multiple transfers) may take longer to process. As well, taxpayers submitting documentation by courier or mail are requested to submit the material at least 15 days prior to closing.

The following documentation must be submitted to the MOF:

For transfers to be registered and for unregistered transfers / dispositions:

  • Cheque for the LTT and the NRST (certified, if not drawn on the solicitor’s trust account), made payable to the “Minister of Finance”
  • Copy of the Agreement of Purchase and Sale, with all schedules attached
  • Copy of the draft Statement of Adjustments (if applicable)
  • If the value of the consideration is based on the fair market value of the land, any appraisals or documentation that is evidence of the fair market value of the land
  • Any additional documents as may be required to determine the value of the consideration

In addition, for transfers to be registered:

  • Authorizing or Cancelling a Representative form(s), completed by each transferee
  • Copy of the Document “in preparation” or three copies of the Transfer/Deed if registration is done on paper
  • If registration is done on paper, two completed Land Transfer Tax Affidavits.

Please submit the required documentation to the following address, either by mail, courier or in person:

Ministry of Finance
Compliance Branch
33 King Street West
Oshawa ON L1H 8H9

Additional information
If you have administrative or technical questions about the NRST, contact:

Ministry of Finance
Land Tax Section
33 King Street West
Oshawa ON L1H 8H9

Toll free: 1‑866‑ONT‑TAXS (1‑866‑668‑8297)
Teletypewriter (TTY): 1‑800‑263‑7776
Fax: 905‑433‑5770
Ministry website: ontario.ca/finance
Map of the Greater Golden Horseshoe Reg

Map of the Greater Golden Horseshoe Region

Frequently Asked Questions about the Non‑Resident Speculation Tax

Is the Non‑Resident Speculation Tax related to the requirement to provide additional information?

The obligation to provide additional information is separate and distinct from the application of the proposed Non‑Resident Speculation Tax (NRST). The NRST applies to certain transactions within the Greater Golden Horseshoe Region (GGH). The requirement to provide additional information applies to certain transactions in all of Ontario. More details on the requirement to provide additional information may be found on our webpage Prescribed Information for the Purposes of Section 5.0.1 Form.

I signed my agreement of purchase and sale on April 19, 2017. I am not a Canadian citizen or a permanent resident of Canada. Do I have to pay the NRST?

There is no NRST payable if the both the seller and the buyer signed a binding agreement of purchase and sale on or before April 20, 2017, and if an assignment of the agreement is not entered into after April 20, 2017.

I am a Canadian citizen living outside of Canada and I wish to purchase land in the Greater Golden Horseshoe Region. Will my purchase be subject to the NRST?

If a Canadian citizen (whether living in Canada or not) buys residential land alone or along with other Canadian citizens or with permanent residents of Canada, he or she will not be subject to NRST. It is not relevant whether any of the Canadian citizens live in Canada or not.

The reference to “not a permanent resident of Canada” refers to a “permanent resident” as defined in the Immigration and Refugee Protection Act (Canada):

permanent resident means a person who has acquired permanent resident status and has not subsequently lost that status under section 46.”

Is the NRST payable on top of the Land Transfer Tax (LTT) or vice versa?

Neither tax is payable on top of the other. NRST and LTT are calculated separately on the value of the consideration for the transfer.

My partner and I are buying a house in Oshawa. I am a citizen of Canada. She is not a citizen or a permanent resident of Canada. Does she have to pay NRST?

If she is not your spouse, NRST will be payable on the full value of the consideration for the transfer of the house. It is not pro‑rated.

If your partner is your spouse, as defined in the Land Transfer Tax Act, the transaction will be exempt from NRST if you are acquiring the house together and no other foreign entities are acquiring an interest in the house (unless the third party is a nominee, protected person, or another spousal unit that also meets the NRST spousal exemption criteria). All transferees must certify that they will occupy the property as their principal residence.

Spouse” means spouse as defined in section 29 of the Family Law Act. This includes either of two persons who are married to each other, or who are not married to each other and who have cohabited,

  • continuously for a period of not less than three years, or
  • in a relationship of some permanence, if they are the natural or adoptive parents of a child.

My spouse and I are buying a house in Kitchener. I am a citizen of Canada. She is not a citizen or a permanent resident of Canada. My brother is buying the property with us, so all three of us are on title. Do we have to pay NRST?

NRST is not payable on the transaction if your brother is a Canadian citizen, a permanent resident of Canada, a nominee under the Ontario Immigrant Nominee Program, or a person conferred “refugee protection” under section 95 of the Immigration and Refugee Protection Act (Canada). NRST is payable if your brother does not fall into one of the four scenarios listed above. Although there is an exemption for spouses if one of the spouses is a Canadian citizen, permanent resident, nominee or refugee, this exemption does not apply if the spouses purchase the property with a third party who does not fall into one of the four scenarios listed above. All transferees must certify that they will occupy the property as their principal residence.

My business partner and I are buying a triplex in Hamilton. I am a permanent resident of Canada. She is not a citizen or a permanent resident of Canada. She is not my spouse. Does she have to pay NRST?

NRST is payable on the purchase by both of you and calculated on the full value of the consideration for the triplex.

However, the purchase may be exempt from NRST if your business partner becomes a nominee or a protected person prior to the date of purchase.

I am buying a house in Mississauga and I am not a Canadian citizen or a permanent resident of Canada. I have applied to be a permanent resident, and hope to complete that process in a year. Do I have to pay the NRST?

If you are not a permanent resident of Canada at the time your deal closes, you must pay the NRST. If you become a permanent resident or citizen of Canada within four years from the date of closing the deal, you may apply for a rebate of the NRST. In order to be eligible for the rebate, you must exclusively hold the property, or hold the property exclusively with your spouse, and the property must have been used as your (and if applicable your spouse’s) principal residence for the duration of the period from within 60 days of the date of closing the deal to the day you apply for the rebate. You have 90 days from the date of becoming a permanent resident to apply for the rebate.

My daughter and I are not citizens of Canada or permanent residents of Canada. My daughter will be attending university and she wants to buy a home in Toronto to live in while she attends the university. Does she have to pay the NRST?

The NRST will be payable on the purchase of the home. She may apply for a rebate of the NRST once the following conditions are met:

  • the home must be purchased only by your daughter (or your daughter and her spouse, if applicable)
  • neither you nor anyone else has any beneficial interest in the home
  • she is enrolled as a full‑time student for a continuous period of at least two years in an “approved institution” (as outlined in Ontario Regulation 70/17 of the Ministry of Training, Colleges, and Universities Act) at a campus located in Ontario, and
  • the house is occupied as her principal residence within 60 days after the date of the purchase or acquisition, for the two year period set out above.

If she meets all of the requirements listed above, an application for this rebate must be made within four years after the date of purchase or acquisition.

I am buying a house in Barrie, while I have a full‑time job. I am not a Canadian citizen or a permanent resident of Canada. Do I have to pay NRST?

Yes, you will have to pay the NRST. You may be eligible for a rebate of the NRST if you legally work full‑time in Ontario for a continuous period of one year from the date of purchase or acquisition. In order to be eligible for the rebate, you must exclusively hold the property, or hold the property exclusively with your spouse, and the property must have been used as your (and if applicable your spouse’s) principal residence 60 days after the date of the purchase or acquisition for the duration of the year.

What do I do if I registered without prepaying the NRST?

Penalty and interest provisions will apply to the non‑payment of the NRST. The MOF has a Voluntary Disclosure Policy that states that if you voluntarily report and pay unpaid tax, with interest, the ministry will not impose a penalty on you. All documentation must be provided along with the voluntary reporting and payment of NRST.

If MOF has not finished processing my prepayment of NRST by the closing date, how do I close my deal?

For closing after December 29, 2017, Teraview will accept payments of NRST. For pre-payments of NRST and LTT, we suggest that the request to pre‑pay the NRST and LTT be submitted with all required documentation a minimum of five business days prior to the closing of the deal.

If I prepay the NRST and LTT, but my deal does not close, can I get my money back?

If the deal did not close because it is not going to be completed, MOF will refund the money paid. However, along with all the required documentation to process a refund request, MOF also requires a signed mutual release proving that the deal is at an end.

If the deal has not closed and the agreement has been amended such that the closing date has been extended, the MOF will not issue a refund.

My client is a landed immigrant of Canada. Is he subject to the NRST when buying a home in Mississauga?

The term “Landed Immigrant” is an outdated term that is no longer used by Immigration, Refugees and Citizenship Canada. You will have to confirm with your client whether or not he is a permanent resident of Canada.

In which specific geographic regions are transfers subject to the NRST?

Transactions within the Greater Golden Horseshoe Region are subject to NRST. The Greater Golden Horseshoe Region contains the following areas:

When will the NRST statement be a mandatory part of the transfer form?

If NRST is payable, transfers without completed NRST statements will not be accepted for registration. If NRST is not payable, until December 29, 2017 , registrations may be completed without the completion of the NRST statements. Effective December 30, 2017 , transfers without completed NRST statements will not be accepted for registration.

How will the audit process work?

The Ministry’s authority to audit for provincial LTT liability (including liability for NRST) is set out in section 10 of the Land Transfer Tax Act. Refer to the general information about ministry audits.

Are non‑share capital corporations such as Condominiums or Co‑operatives subject to NRST?

Yes, if the transferee is a foreign corporation that acquires land which contains at least one and not more than six single family residences in the Greater Golden Horseshoe Region.

Are Canadian citizens who are outside of Canada for more than 183 days, i.e. snow birds, subject to the NRST?

A Canadian citizen would not generally be subject to the NRST even if the individual is not living in Canada.

Are assignors subject to the NRST?

The NRST would not apply to an assignor if the assignor does not acquire a beneficial interest in the land for the purposes of the Land Transfer Tax Act.

I entered into an Agreement of Purchase and Sale before April 21, 2017. The Agreement is being assigned after April 20, 2017, does the NRST apply?

If the Agreement of Purchase and Sale is assigned after April 20, 2017, the NRST would apply.

If an Agreement of Purchase and Sale is entered into after April 20, 2017, by a foreign entity and subsequently assigned to a Canadian citizen or permanent resident of Canada does NRST have to be paid by the Canadian citizen or permanent resident?

The Canadian citizen or permanent resident of Canada who acquired the assignment would not be subject to the NRST, unless he or she is a taxable trustee to which the NRST applies.

I am buying a property that has both residential and non‑residential land. How do I calculate the apportionment of consideration that is attributable to residential land (subject to NRST) and non‑residential land (not subject to NRST)?

A reasonable self‑assessment is required by taxpayers in apportioning the value of the consideration for the purposes of the NRST. The apportionment would be based on the value of the residential land as compared to the non‑residential land, not the square footage of the two.

In a new home purchase how is the value of the consideration to which NRST applies determined?

The value of the consideration for NRST purposes will be determined in accordance with the existing provisions of the Land Transfer Tax Act.

I would like to authorize a representative to pay the NRST on my behalf. How do I do this?

The Authorizing or Cancelling a Representative form allows you to authorize the Ministry of Finance to deal with another individual (such as your spouse, other family member, accountant, tax consultant or solicitor) as your representative for Ontario tax or program matters.

How should Part 1 of the Authorizing or Cancelling a Representative form be completed in order to authorize payment of the NRST by a representative?

The box next to the Land Transfer Tax Act should be chosen.

Will Part 1 of the Authorizing or Cancelling a Representative form be updated to reflect the appropriate legislation under which the NRST is being paid?

No, the NRST is incorporated into the Land Transfer Tax Act, therefore Part 1 of the form does not need to be updated.

What are the appropriate account or reference number(s) referred to in Part 1 of the Authorizing or Cancelling a Representative form?

This is the account number or reference number assigned by the Ministry of Finance. If the ministry has not provided an account number or reference number to the client who is completing the Authorizing or Cancelling a Representative form, then the field for the account or reference number will remain blank.

How should Part 2 of the Authorizing or Cancelling a Representative form be completed so that the Scope of Authorization is limited to the payment of land transfer tax and the NRST?

If the client wants the representative to act only with respect to LTT, which includes NRST, the client selects the box Only the matters specified below. Then the client is to select the box Other and write the text Payment of LTT and NRST.

Can I pay NRST by couriering funds to Oshawa or do I have to pay in person?

The NRST can be paid to the Ministry of Finance in Oshawa by courier, mail or in person. Please refer to the above section, entitled How to pre-pay the Land Transfer Tax and the NRST to the MOF. After December 29, 2017, Teraview will accept payment of NRST at the time of registration. For paper registrations on which NRST is payable, payment of NRST and LTT must continue to be made at the Ministry of Finance.

I am purchasing property subject to the municipal land transfer tax. Can I pay all of the required land transfer tax at the Ministry of Finance in Oshawa?

The Ministry of Finance in Oshawa does not collect municipal land transfer tax on behalf of the City of Toronto. Both the general provincial LTT and the NRST can be paid to the Ministry of Finance in Oshawa by courier, mail or in person. For further payment details please refer to the above section entitled How to pre-pay the Land Transfer Tax and the NRST to the MOF.

Can the vendor’s lawyer sign for completeness without getting a NRST receipt number?

Currently this is not feasible through the Teraview platform.

Q2 2019 registered a total of 563 investment property sales transactions over $1 million, representing a total investment value of $5.8 billion

TORONTO – Altus Group, a leading provider of software, data solutions and independent advisory services to the commercial real estate industry, today announced the second quarter of 2019 results for commercial real estate investment in the Greater Toronto Area (GTA). Total investments for the first half of 2019 reached $10 billion, down 13% compared to the $11.4 billion registered in the first half of 2018. After five straight quarterly declines, total investments were up 43% compared to first quarter 2019, with strong momentum heading into the second half of 2019.

GTA Property Transactions – All Sectors by Quarter

Second quarter transactions managed to record the fourth highest quarterly investment totals ever after five consecutive quarterly declines. Confidence in the GTA market remains high as investors continue to view the GTA as a stable and attractive market, which provides a strong potential for higher returns. Re-development sites remain a driving force as it accounted for nearly 38% of all investments.

The office and residential land sector lead all asset classes this quarter, each representing about 20% of the $5.8 billion total. The largest transaction seen this quarter was the $640 million sale of Atrium on Bay, a one million square foot office property located in the heart of downtown Toronto. Pent up demand and low office vacancy rates, 3.1% in Downtown Toronto and 6.8% in the GTA for the second quarter, have resulted in growing demand for office space in submarkets just outside of the core.

Q2 2019 GTA Property Transactions – Total $ Volume by Sector

The land sectors collectively accounted for $2.2 billion, which represents a 20% increase compared to the previous quarter, but a 25% decrease compared to the same period last year. The ICI land sector was up 69% compared to the previous quarter and registering $701 million in transactions, but down 47% compared to the same quarter last year. A notable ICI land acquisition this quarter was a 129 acre site located in Ajax which was purchased by Crestpoint Real Estate Investments Ltd. for a total consideration of $72,975,500. As reported by Altus Group’s Q2 2019 Investment Trends Survey, respondents had a positive outlook with regards to industrial land in the GTA market.

Future high density re-development sites comprised nearly 60% of the $1.1 billion recorded in the residential land sector this quarter, with the largest sale being 39 Newcastle Street located in Etobicoke. This 2 acre parcel, which was acquired by Vandyk Group of Companies for $90 million, is ideally situated within a short walk to the Mimico GO station. As housing demand persists due to the rapid population growth in the GTA, residential re-development projects will continue to be in the forefront. Investors continue to look at options to re-position and maximize their returns through the intensification of excess lands existing on current assets. This example is evident in recent development applications submitted on two prominent shopping malls in the City of Toronto, Sherway Gardens and Dufferin Mall. The application for Sherway Gardens in Etobicoke would see an infill development of the existing parking lot with eight new mixed-use buildings containing residential, retail, office and hotel uses, adding approximately 3.2 million square feet of space. The application for Dufferin Mall seeks to re-develop the northern portion of the site for purpose built rental towers containing 1,135 residential units and retail space which would provide an additional 1.1 million square feet of space to the asset.

The apartment sector saw a 266% jump from the first quarter and also a 52% increase compared to the same period last year. The largest transaction recorded this quarter was the $220 million sale of Rossland Park in Oshawa. The 911 unit complex which sits on 40 acres was acquired by Q Residential who may look to add density to the site in the near future.

The retail sector was the most traded asset this quarter and saw a 25% increase in investments compared to the same quarter last year. Investors continue to re-position and evolve their retail assets amid competition with e-retailers by offering more customer on site amenities and experiences. The largest transaction this quarter was the 50% interest sale of Stock Yards Village, a 500,000 square foot multi-building shopping complex which sits on nearly 20 acres. This retail complex, which was formerly anchored by Target, was acquired by RioCan REIT who now owns a 100% interest stake in the property.

According to the Altus Group Investment Trends Survey, investors remain particularly confident in the industrial sector as vacancy in the GTA remains tight, with second quarter vacancies sitting at 0.8%. The industrial sector recorded $944 million of investments this quarter, which is up 22% compared to the previous quarter and up 20% in comparison with the same period last year. With the emergence of e-commerce resulting in the expectation of same-day deliveries, warehouse space within proximity of the GTA has lead to a growing demand for larger format warehouse facilities containing higher than average ceiling heights.

Two notable transactions this quarter include:

· 2562 Stanfield Road, a two building 361,800 square foot property with ceiling heights up to 36 feet. The property, which is located in the City of Mississauga, was acquired by Pure Industrial Real Estate Trust for a total consideration of $38 million.

· 1602 Tricont Avenue, a 258,000 square foot property with ceiling heights up to 35 feet. The property, which is located in the Town of Whitby, was acquired by Dream Industrial REIT for a total consideration of $35.8 million.

Purchaser activity this quarter was predominantly comprised of private investors, while institutional buyers and public investors acquired the larger trophy assets. Once again, foreign investors were not as prominent this quarter. It is anticipated that the record activity that occurred in Q2 2019 will continue into the second half of 2019. Challenges remain in the market as willing buyers are being met with a lack of product.