Following up on our earlier post about the Ontario Non-Resident Speculation Tax that became effective June 1, the following is a summary of current status as obtained from reliable sources but which cannot and should not be relied upon as legal or tax advice and Weichert clients should review this tax law status with their applicable tax advisors.
Quite simply, several material developments have occurred that corporate clients and relocation companies should be aware of as they undertake home sale transactions within the Greater Golden Horseshoe* Region (GGH).
Foreign national purchasers (essentially any buyer who is not a Canadian citizen or permanent resident or a couples purchase in which neither spouse is a Canadian citizen) will be subject to paying the 15% purchase price speculation tax, and relocation companies and clients should be prepared accordingly. Please note that some special foreign purchaser exemptions may apply, and would need to be pursued by experienced local counsel with the Ontario Ministry of Finance.
Pending a formal opinion issuance from the Ontario Ministry of Finance, recent indications are that relocation companies acquiring property in the GGH area by traditional deed in blank and power of attorney process either by way of a guaranteed buyout or following the Worldwide ERC-sanctioned 11-step home sale transaction process through a cross border move to the United States, will continue to avoid paying the Ontario Land Transfer Tax and also be able to avoid paying the 15% purchase price speculation tax. This is only if the relocation company does not retain ownership of the subject GGH property for more than one hundred and eighty (180) days.
Ownership of a subject GGH property for more than one hundred and eighty (180) days by a relocation company that is considered a “foreign corporation” under the definition of the Land Transfer Tax Act would trigger the 15% purchase price speculation tax. In light of this, relocation companies and their clients should plan accordingly to expedite the cost-effective disposition of subject GGH properties. As further material developments warrant, we will be back in touch with updated status on this matter.
* The Greater Golden Horseshoe area includes 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 Simcoe, City of Toronto, Regional Municipality of Waterloo, County of Wellington and Regional Municipality of York.
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