Former Raptors Coach Nick Nurse Challenges Ontario Non-Residential Speculation Tax

By Ridhima Pathak

Buying a home in Ontario comes with tax implications such as the Land Transfer Tax. In addition to this, if you are a foreign buyer, you are required to pay the Non-Resident Speculation Tax (NRST) calculated at 25% of the purchase price as of October 25, 2022.

The Former Raptors Coach Nick Nurse is battling Ontario over the NRST as he purchased a home in October 2021 for $4.65 million. At the time, the NRST was 15%, and as a non-Canadian, Nick Nurse had to pay approximately $697,500 in taxes for this purchase.

The Government currently offers two rebates to foreigners that have paid the NRST as follows:

1. Permanent Resident of Canada NRST Rebate – this is available to an individual that has become a permanent resident (PR) of Canada. In order to qualify for this rebate, the following conditions must be met:
   1. Become PR within 4 years of your purchase.
   2. Hold the property alone or with a spouse. Please note that there are strict rules over owning the property with a spouse and that you must be a spouse as per Section 29 of the Family Law Act. You must also be spouses of one another on the day of the conveyance. If you become spouses AFTER the day of closing, that will not be sufficient and your rebate application will be denied.
   3. Occupy the property as a principal residence for the duration of the period that begins within 60 days after the date the conveyance is registered and ends when they make an application for the rebate or the rebate conditions have been met, whichever is later. In order to determine that occupying the principal residence, the following factors would be considered – where you sleep majority of the time, where you eat majority of the time, where you go to work or school, where you consume majority of your utilities, and whether you are using the home for seasonal or a recreational purpose.
2. Industrial Use Rebate – this is available if the parties are classified as a property class under the Assessment Act i.e. industrial property class, large industrial property class, or aggregate extraction property class.

There was a transitional NRST rebate for homes purchased on or before March 29, 2022, which has been phased out and no longer available. Any applications were to be submitted by March 31, 2025. This rebate was offered to individuals that were international students or a foreign national working in Ontario. Based on having a work permit with the Raptors/MLSE, Nick Nurse applied for the transitional NRST rebate in March 2024 after selling his property in September 2023. The rebate application was denied as Nick Nurse and his spouse did not occupy the property up to the date at which the rebate was applied for.

While the complete details are limited, the above circumstance demonstrates that the Ministry has complete discretion over such rebates and that the rules must be strictly complied with.

Please note that there is a current Foreign Buyer Ban in place preventing non-Canadians from buying residential real estate, which remains in effect until January 1, 2027.

If you are considering buying a home in Ontario, please contact our residential real estate lawyer, Ridhima Pathak (ridhima@sorbaralaw.com) for information on land transfer tax implications for residential properties.