Foreign National Spousal Exemptions to Purchase Real Estate in Ontario under the Prohibition Act and the Non-Resident Speculation Tax
In Ontario you have 2 things to consider:
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The prohibition act, which the exemption you can reply on is in section 4(2)(c)
“…an individual who is a non-Canadian and who purchases residential property in Canada with their spouse or common-law partner if the spouse or common law-partner is a Canadian citizen, person registered as an Indian under the Indian Act, permanent resident or person referred to in paragraph (a) (temp resident) or (b) (protected person);”
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The non-resident speculation tax (NRST):
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An exemption from NRST may be available for registered transfers if the transferee is:
- a nominee
- a protected person
- a spouse of
- a Canadian citizen
- a permanent resident of Canada,
- a nominee
- a protected person
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All NRST exemptions require that all transferees certify they will occupy the home as their principal residence within 60 days after the date the conveyance is registered. This means that at the time of closing the transaction, every transferee intends to occupy the home as their principal residence, living in it as their main residence. Simply designating the home as a principal residence with the Canada Revenue Agency is not sufficient to meet the requirement to occupy the home as their principal residence.
Under the NRST Spousal exemption: An exemption from NRST may be available to foreign nationals who are in certain spousal arrangements if all of the following criteria are met:
- the foreign national is a spouse of a Canadian citizen, permanent resident of Canada, nominee or protected person
- each spouse is a transferee named in the conveyance
- if the foreign national and their spouse hold the property with any other transferees, those transferees must be individuals who are either
- Canadian citizens, permanent residents of Canada, nominees or protected persons
- the spouse of one of the transferees listed above
- all transferees must certify that they will occupy the property as their principal residence within 60 days after the date the conveyance is registered
The definition of spouse, for NRST and LTT purposes, includes either of two persons who are married to each other, or who are not married to each other and who have cohabited in at least one of the following ways:
- continuously for a period of not less than three years
- in a relationship of some permanence, if they are the parents of a child as set out in section 4 of the Children’s Law Reform Act
It is required that transferees be spouses of each other on the day of closing to qualify for the spousal exemption. Becoming spouses after the day of closing will not retroactively qualify you for the exemption, and no refund will be paid.
