I have been reading about Non-Resident Speculation Tax (NRST) in Ontario, and clearly I have a few things more to figure out. First off, it seems to be in effect now, so it is worth following up on. I will put the link to the bulletin below in case you want to read through the plan. It seems that they have covered off making a partnership with a Canadian as a way to avoid the tax. Even with a 50/50 deal the whole purchase price is taxed if one of the partners is a non-resident.
There does seem to be an exception for couples, married or cohabiting, with or without kids. There are also rules to help people aiming to become permanent residents or protected persons (as defined by the Immigration and Refugee Protection Act.)
There are also rebates if someone becomes a permanent resident of Canada sometime after the purchase, or is an international student enrolled full-time for a continuous period of at least twp years, and for foreign nationals working in Ontario.
They are putting systems in place to prevent tax avoidance, by saying all land transfers are subject to audit and they have penalties that can include fines and/or imprisonment.
All-in-all, if you support the tax they seem to have covered the bases so that Canadians cannot get paid to be on title to help the foreign buyer avoid the tax. They even seem to be making it so that even if a Canadian and a foreign national have a baby together, making it a fairly serious relationship (married or unmarried), the foreign national must certify "they will occupy the property as their principal residence." This sort of ties people to living here, which is really the point of a "non-resident" tax I suppose. It is interesting, because while they can say they plan to live here, what if they do not? How will this be audited? How will the tax be retroactively enforced? What if they meant it when they said they would stay, but life changes?
I still have more questions I need to find answers for, but in the meantime non-residents should start by reading the online information, then contact the Ministry of Finance, or if you have a good lawyer, and can pay the bill, give the lawyer a call, this is all pretty new, so give yourself time to understand the rules, exemptions etc. make sure you know what you can afford, with or without the tax, before you buy.
Link to Basic information and some FAQs on the Ontario government site
