How to Claim the Ontario Nominee Exemption of the Ontario Non-Resident Speculation Tax (NRST) – Toronto Tax Lawyer Guide

Overview – The Ontario Non-Resident Speculation Tax and the Nominee Exemption

Ontario’s non-resident speculation tax applies when residential real estate anywhere in the province is acquired by a foreign entity or taxable trustee. Effective October 25, 2022, the non-resident speculation tax rate is 25% of the value of the consideration for the transfer, and the tax now applies province-wide rather than only within the Greater Golden Horseshoe region where it began in 2017. Buyers closing in Toronto face an additional layer: the city’s own 10% municipal non-resident speculation tax, in effect since January 1, 2025, which can push the combined provincial and municipal rate to 35% on a single transaction.

Given the size of the tax, foreign nationals who qualify for an exemption stand to save a substantial amount of money. For a comparison of how Ontario’s regime differs from British Columbia’s foreign buyer tax, see our BC foreign buyer tax vs. Ontario non-resident speculation tax guide.

One of the more significant exemptions available is the Ontario nominee exemption, which can eliminate the non-resident speculation tax entirely for a foreign national nominated under Ontario’s immigration nominee program. The exemption remains part of the current non-resident speculation tax rules, but its conditions are narrow and unforgiving, and a taxpayer who misjudges them can end up paying the full 25% (or 35%, in Toronto) despite believing they qualified.

Background – How the Non-Resident Speculation Tax and the Nominee Exemption Work

The non-resident speculation tax applies to a foreign entity or taxable trustee that acquires an interest in “designated land,” meaning land containing one to six single-family residences. A “foreign entity” means either a foreign national or a foreign corporation. A foreign national is an individual who is neither a citizen of Canada nor a permanent resident of Canada. A foreign corporation is a corporation not incorporated in Canada, or a corporation controlled, directly or indirectly, by one or more foreign nationals or corporations not incorporated in Canada.

A “taxable trustee” is the trustee of a trust with at least one foreign entity as a trustee, or a trust with no foreign entity trustees where a beneficiary of the trust is a foreign entity who holds a beneficial interest in the property immediately after it is acquired. Mutual fund trusts, real estate investment trusts, and SIFT trusts are excluded from this definition.

The non-resident speculation tax is calculated on the full value of the consideration for the transfer, and it is not prorated based on the size of the interest the foreign entity acquires. A transaction where a foreign national acquires a 5% interest in a property, with a Canadian citizen acquiring the remaining 95%, results in the same non-resident speculation tax liability as if the foreign national had acquired the entire property. Each transferee is jointly and severally liable, meaning a Canadian citizen or permanent resident co-purchaser can be on the hook for the tax if their foreign co-purchaser does not pay it.

Ontario’s current exemptions from the non-resident speculation tax are limited to registered transfers where the transferee is a nominee under a provincial immigration nominee program, a protected person under the Immigration and Refugee Protection Act, or the spouse of a Canadian citizen, permanent resident, nominee, or protected person. This article focuses on the nominee exemption.

Foreign nationals who pay the tax and later become permanent residents within four years of closing may instead be eligible to apply for a rebate after the fact; that rebate process, and the Yavari decision on the Ministry of Finance’s discretion to grant relief in special circumstances, are addressed in our companion piece on NRST exemptions and rebates on TaxLawCanada.com.

Key Issues and Findings – Requirements of the Ontario Nominee Exemption

The Ontario immigration nominee program is run by the government of Ontario in partnership with the government of Canada. It allows foreign nationals with skills relevant to Ontario’s economic development and labour market to be nominated for Canadian permanent residence.

The program has several streams, including categories for foreign nationals with a full-time job offer in Ontario, foreign nationals with a graduate degree from an Ontario university, and foreign nationals looking to start a new business in the province. A foreign national must apply to the government of Ontario and have that application approved before being nominated; nominees can then apply to the federal government for permanent residence.

For the nominee exemption to apply to a real estate purchase, all of the following conditions must be met:

• The foreign national acquiring an interest in the real estate is nominated under the Ontario immigration nominee program at the time of the transaction.
• Every other person acquiring an interest in the real estate in the same transaction is a Canadian citizen, a permanent resident of Canada, an Ontario nominee, or a protected person.
• All individuals acquiring an interest in the property certify, at the time of registration, that they will occupy it as their principal residence within 60 days after the conveyance is tendered for registration.
• The Ontario nominee has applied to become a permanent resident of Canada, or certifies that they will apply to become a permanent resident of Canada.

The 60-day occupancy certification is a relatively recent tightening of the exemption. For conveyances registered before March 27, 2024, the regulation only required transferees to certify an intention to use the property as a principal residence, with no fixed deadline.

Effective March 27, 2024, the Ministry of Finance amended the occupancy requirement under sections 2, 3, and 4 of Ontario Regulation 182/17, including the nominee exemption, to require each transferee to certify that occupancy will begin within 60 days of registration. The same amendments clarified that a nominee, protected person, or spousal exemption cannot be claimed where the conveyance is to a taxable trustee, and that where the exemption is claimed for a condominium parking or storage unit, the transferee must certify that the unit will be used in connection with a principal residence in the same condominium complex, also within 60 days.

Figure: Ontario nominee exemption eligibility checklist.

A protected person is a foreign national who has been conferred refugee protection under section 95 of the Immigration and Refugee Protection Act.

The exemption is unforgiving in application. It is claimed at the time of registration through Ontario’s electronic land registration system, and supporting documentation, including the nomination certificate, may be requested by the Ministry of Finance to substantiate the claim. It does not apply retroactively to a transaction that has already closed without it, and it is not available under nominee programs administered by other provinces, only Ontario’s.

Implications for Foreign Buyers and Ontario Nominees

The nominee exemption’s conditions produce results that are not always intuitive. If an Ontario nominee purchases a home jointly with a Canadian citizen and only the nominee plans to occupy the property as a principal residence, the exemption does not apply, because every purchaser must certify that they will occupy the property as their principal residence. The same is true if any joint purchaser is not a Canadian citizen, permanent resident, Ontario nominee, or protected person, even where the nominee themself clearly qualifies.

The 60-day occupancy deadline introduced in March 2024 adds a further, timing-sensitive risk that did not exist under the old rules. A nominee who is still finishing an overseas relocation, waiting on a lease to end, or coordinating a move with family members may not be able to occupy the property within 60 days of registration, even if they fully intend to live there. Since the certification is now tied to a fixed deadline rather than a stated intention, nominees should confirm before closing that they can realistically move in within that window, not simply that they plan to eventually.

Nominees who are still working through the permanent residence application process also face timing risk on that front. The exemption requires that the nominee has applied for permanent residence, or certifies an intention to apply; it does not require permanent residence to have already been granted. But a nominee whose nomination certificate lapses, or who does not follow through on the permanent residence application after closing, can find the exemption unwound and the full 25% tax, plus interest, assessed after the fact. In Toronto, the same purchase without the exemption also attracts the city’s 10% municipal non-resident speculation tax, so the financial exposure of getting this wrong is considerably higher for nominees buying within city limits than it was before January 1, 2025.

“The nominee exemption looks straightforward on paper, but the certification and co-purchaser conditions catch out nominees who structure a purchase with a spouse or family member without realizing that everyone on title has to independently qualify. We regularly see nominees who assumed the exemption was automatic once they had their nomination certificate in hand, only to find out at registration, or worse, on a later audit, that a co-purchaser or an occupancy detail disqualified the whole transaction.”

— David J. Rotfleisch, founding tax lawyer and CPA at Rotfleisch & Samulovitch, and a Law Society of Ontario Certified Specialist in Taxation

Takeaway

The Ontario nominee exemption remains one of the few complete exemptions from the non-resident speculation tax, but it is a narrow exemption with strict, interlocking conditions around co-purchasers, occupancy, and the nominee’s own immigration status. With the tax now at 25% province-wide, and as high as 35% on a Toronto purchase once the municipal non-resident speculation tax is added, the cost of assuming the exemption applies when it does not is significant.

Pro Tax Tips

• If you are a foreign national considering purchasing Ontario real estate and relying on the nominee exemption, you should consult an experienced tax law firm in Toronto before closing, not after.
• Confirm before you enter into an agreement of purchase and sale that every co-purchaser meets the citizenship, residence, or nominee status required, and that everyone on title is prepared to certify occupancy as a principal residence, since a single co-purchaser who cannot make that certification will disqualify the exemption for the entire transaction.
• Since March 27, 2024, that certification comes with a hard 60-day occupancy deadline rather than an open-ended statement of intention, so build your closing date and move-in logistics around that window rather than assuming a general intention to occupy will be enough.
• It is also worth building in a plan for what happens if your nomination certificate is close to expiring before closing, since the exemption depends on your status as a nominee at the time of the transaction.
• If you have already closed without claiming the exemption, or if your circumstances mean you no longer qualify for it, ask your tax lawyer about whether a rebate may be available once you become a permanent resident, or whether the Ministry of Finance’s discretionary relief under section 20 of the Land Transfer Tax Act is worth pursuing given your specific facts.

FAQs

What is the Ontario non-resident speculation tax?

The non-resident speculation tax is a 25% tax that Ontario applies to the purchase or acquisition of an interest in most residential property in the province by a foreign national, foreign corporation, or taxable trustee, in addition to the province’s regular land transfer tax.

Does the nominee exemption still apply in 2026?

Yes. The nominee exemption remains one of the exemptions currently available under the non-resident speculation tax rules, alongside the exemptions for protected persons and spouses of qualifying individuals.

Who qualifies as an Ontario nominee for the exemption?

A foreign national nominated under the Ontario immigration nominee program, which includes streams for skilled workers with a job offer in Ontario, international graduate students from Ontario universities, and foreign entrepreneurs starting a business in the province.

Can I use a nominee certificate from another province?

No. The exemption applies only to nominees under the Ontario immigration nominee program, not to nominee or provincial immigration programs administered by other provinces.

What happens if I buy a home jointly with a Canadian citizen?

The exemption can still apply, but only if every purchaser on title is a Canadian citizen, permanent resident, Ontario nominee, or protected person, and every purchaser certifies they will occupy the property as their principal residence.

Does the exemption apply if my spouse will not live in the property?

No. If any purchaser on title, including a spouse, does not intend to occupy the property as a principal residence, the exemption does not apply to the transaction.

Is there a deadline to move into the property under the nominee exemption?

Yes. For conveyances registered on or after March 27, 2024, each transferee must certify that they will occupy the property as their principal residence within 60 days of the date the conveyance is tendered for registration. Before that date, the regulation only required a stated intention to occupy, with no fixed deadline.

Can a corporation or trust claim the nominee exemption?

No. The nominee exemption, along with the protected person and spousal exemptions, is not available where the conveyance is made to a taxable trustee. These exemptions apply only to individual foreign nationals who meet the personal eligibility conditions.

Do I need to already have permanent residence to claim the exemption?

No. You need to have applied for permanent residence, or to certify that you will apply, at the time of the transaction. Permanent residence does not need to have been granted yet.

How is the exemption claimed?

The exemption is claimed at the time of registration through Ontario’s electronic land registration system, with supporting documentation, such as the nomination certificate, available on request from the Ministry of Finance.

What if I already paid the non-resident speculation tax and later become a permanent resident?

You may be eligible to apply for a rebate of the tax if you become a permanent resident within four years of your purchase date and meet the occupancy and other conditions. See our companion article on non-resident speculation tax rebates for the current rules and filing deadlines.

Does Toronto’s municipal non-resident speculation tax have its own nominee exemption?

The municipal tax operates alongside the provincial tax, and exemption eligibility should be confirmed for both levels before closing on a Toronto property, since a gap between the two could leave a portion of the combined tax payable even where one exemption applies.

Can the Ontario nominee exemption be denied after closing?

Yes. Because the exemption depends on facts about occupancy, co-purchaser status, and the nominee’s ongoing immigration status, the Ministry of Finance can reassess and deny the exemption on audit if those conditions are later found not to have been met.

DISCLAIMER: This article provides broad information. It is only accurate as of the posting date. It has not been updated and may be out-of-date. It does not give legal advice and should not be relied on as tax advice. Every tax scenario is unique to its circumstances and will differ from the instances described in the article. If you have specific legal questions, you should seek the advice of a Canadian tax lawyer.