Municipal Land Transfer Tax & Municipal Non-Resident Speculation Tax

Effective January 1, 2025, the new Municipal Non-Resident Speculation Tax (MNRST) of 10 per cent will apply for foreign buyers on the full purchase price of certain residential properties in Toronto. The City does not have a grandfathering provision for the MNRST on Agreements of Purchase and Sale executed prior to January 1, 2025. This tax is in addition to the Municipal Land Transfer Tax. 

Municipal Land Transfer Tax (MLTT)

  • MLTT is charged on properties purchased in Toronto and on unregistered dispositions of a beneficial interest in land with closing dates on or after February 1, 2008. As per the Provincial Land Transfer Act and property transaction requirements, payment for the MLTT is due upon registration of your property. For further information, please contact your real estate lawyer.

Municipal Non-Resident Speculation Tax (MNRST)

  • MNRST is collected from non-residents (foreign buyers) on certain residential properties purchased in Toronto. This tax aims to safeguard the availability of residential housing supply in Toronto and helps maintain a level of affordability in the residential real estate market by discouraging international buyers from purchasing property they do not intend to live in, or where the purchase is for purely speculative motives. The MNRST applies in addition to the MLTT.

 

Land Transfer Tax ‘De Minimis’ Partnership Exemption

The City is working with the Ministry of Finance to ensure a consistent application of the recent regulatory clarifications for all applicable ‘De Minimis’ transactions since the February 2008 introduction of the MLTT.

MLTT Audits

The City performs audits of exemptions applied at the time of registration. If you are selected, you will be required to provide supporting documentation as requested. You must keep your records for a period of seven years. Failure to comply with this requirement will result in immediate payment of tax, interest and penalty.

As a taxation measure granted under the City of Toronto Act, 2006, Toronto City Council approved:

  • Effective February 1, 2008, Municipal Land Transfer Tax (Toronto Municipal Code Chapter 760)  will be applied to purchases on all properties in the City of Toronto, in addition to the Provincial Land Transfer Tax.

Revenue Services charges various administrative fees in accordance with the City of Toronto Municipal Code:

  • Effective April 1, 2016 and administration fee will be charged for processing each MLTT transaction.

On February 15, 2017, City Council considered item EX22.2 and adopted the following:

The MLTT administrative fee is applicable to all MLTT transactions, with the following exception(s):

Effective January 1, 2025, a Municipal Non-Resident Speculation Tax (MNRST) a rate of 10 per cent will apply for foreign buyers on the purchase price of certain residential properties in Toronto, in addition to the MLTT.

In 2017 the province levied it’s own Non-Resident Speculation Tax (NRST). The City’s MNRST applies the same criteria to applicability, rebates, refunds and exemptions as the provincial NRST.

Definitions

  • A ‘foreign entity’ is either:
    • Foreign national – an individual who is not a Canadian citizen or permanent resident of Canada.
    • Foreign corporation – a corporation that is incorporated outside of Canada or, in certain circumstances, is controlled by a foreign entity
  • A ‘taxable trustee’ is either a trustee for:
    • a trust with at least one trustee that is a foreign entity.
    • a trust with at least one beneficiary that is a foreign entity

Types of properties subject to the MNRST

The MNRST applies to the transfer of land (full purchase price) which contains at least one and not more than six single family residences. Examples of land containing at least one single family residence include land containing a:

  • detached house
  • semi-detached house
  • townhouse
  • condominium unit

In a situation involving the purchase of multiple condominium units, each unit is considered land containing one single family residence. The MNRST does not apply to other types of properties such as:

  • multi-residential apartment
  • buildings with more than six units
  • agricultural land
  • commercial land
  • industrial land

Value of the consideration

MNRST is calculated on the “value of the consideration”, which is normally the amount paid for the land in addition to the remainder of any mortgage or debt assumed as part of the purchase agreement.

In certain cases, the value of the consideration is based on the “fair market value” of the land, such as where the transfer is of:

  • a lease with a term that can exceed 50 years,
  • land from a corporation to one of its shareholders, or
  • land to a corporation if corporate shares are issued.

Exemptions

Consistent with the provincial exemptions, an exemption from the MNRST may be available if the applicant is a:

  • 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 at the time of the purchase or acquisition
  • Spouse – a foreign national who jointly purchases residential property with a spouse (as defined in the Land Transfer Tax Act), who is a Canadian citizen, permanent resident of Canada, nominee or protected person.

    Implementation and Collection

    • Consistent with the MLTT process, the City will work with Teranet Inc. and the Province in relation to the collection and enforcement of the MNRST and the sharing of information.
    • The MLTT & MNRST funds for foreign buyers are due upon registration of the property.
    • As part of the registration process, all taxpayers are required to make a declaration or claim an exemption as to the MNRST liability.