Buying Real Estate in Ontario as a Non-Resident: Legal Checklist

Buying property in Ontario as a non-resident is completely legal, but the process involves extra taxes, disclosures, and closing requirements that many buyers overlook. Whether you're purchasing an investment property, buying a home for future relocation, or expanding your real estate portfolio, having a clear legal plan is essential.

This guide breaks down the core steps, while linking you to detailed resources so you can explore each requirement directly on our website.

1. Understand the Non-Resident Speculation Tax (NRST)

Ontario imposes a special tax called the Non-Resident Speculation Tax (NRST) on foreign buyers purchasing residential property in certain areas. This tax has undergone multiple changes and can be confusing for many non-resident clients.

Before making an offer, learn more about the NRST, including current rates and exemptions.

NRST rules apply even if:

• You are buying with a local Canadian permanent resident

• You do not plan to occupy the property

• You are purchasing through a corporation

• You own other properties outside Canada

Failing to calculate NRST correctly can lead to surprise expenses at closing or penalties if underpaid.

2. Review the Agreement of Purchase and Sale Carefully

Non-resident buyers should never sign an offer without a lawyer reviewing the Agreement of Purchase and Sale (APS) first. The APS includes important deadlines, conditions, and financial obligations that must be fully understood.

To see how we assist buyers with APS reviews, learn more on our purchase and sale page.

Key issues your lawyer will review include:

• Clear closing dates

• Deposit conditions

• Inspection and financing clauses

• HST requirements

• Title information

• Risks related to non-resident ownership

Because non-residents often buy remotely, clarity in the APS becomes even more important.

3. Confirm If You Need a Non-Resident Holdback

Canada requires that certain property sellers (and sometimes buyers) address tax withholding rules under the Income Tax Act. Non-resident sellers typically face a 25% withholding tax, but buyers may also be affected when purchasing from a non-resident.

A real estate lawyer helps determine:

• Whether a holdback applies
   
• How much tax must be withheld?
   
• What CRA forms are required
   
• How to avoid penalties for incorrect withholding
   

Non-resident closings require careful coordination to meet CRA rules.

4. Prepare Identification and Source of Funds Documentation

Banks and lawyers in Ontario follow strict anti–money laundering (AML) laws. Non-residents should prepare:

✔ Passports or government ID
✔ Proof of legal name
✔ Proof of funds
✔ International bank statements
✔ Gift letters if family is contributing
✔ Employer or income verification (if financing)

Expect to provide more documentation than a local buyer. This is normal and required under Canadian law.

5. Understand Financing Rules for Non-Residents

Financing is available for non-residents purchasing Ontario real estate, but requirements differ:

• Higher down payments (typically 35% or more)
   
• Strong income documentation
   
• International credit reports may be required
   
• Mortgage approval takes longer
   

Your lawyer and lender may also require additional documents to confirm residency status and compliance.

6. Closing Requirements for Non-Resident Buyers

Non-resident purchases follow the same legal closing steps as any Ontario real estate transaction, but they often require additional verifications.

Learn more about our closing services for non-residents.

Your lawyer will handle:

✔ Title search
✔ LTT and NRST calculations
✔ Review of mortgage instructions
✔ Verification of identity
✔ Execution of closing documents (often via video signing)
✔ Registration of the transfer
✔ Delivery of your keys through a local representative

Remote closings are standard and legally accepted for international clients.

7. Be Ready for Land Transfer Tax (LTT) in Ontario

All buyers, including non-residents, must pay Land Transfer Tax (LTT) upon purchasing property in Ontario. If purchasing in Toronto, you must also pay the Toronto Municipal LTT.

Combined with NRST, these taxes can significantly increase your closing costs. Early planning helps avoid delays or shortfalls in funds.

8. Consider Long-Term Ownership Implications

As a non-resident investor or homeowner, consider the following:

• Property management for rental units
   
• Annual tax filings for rental income
   
• CRA non-resident withholding requirements
   
• Future capital gains tax upon selling
   
• Currency conversion and banking fees
   

Your lawyer can coordinate with accountants and property managers to ensure long-term compliance.

9. Work With a Lawyer Experienced in Non-Resident Transactions

Non-resident purchases involve more steps and more documentation than standard transactions. A lawyer familiar with these transactions helps you:

✔ Prevent tax mistakes
✔ Complete NRST forms correctly
✔ Review the APS properly
✔ Avoid penalties for withholding errors
✔ Complete your purchase remotely

Khan Law LLP serves clients across Canada and worldwide, providing full support for non-resident property buyers.

Your Next Step

Buying real estate in Ontario as a non-resident is entirely possible, but the process requires careful planning. By following a clear legal checklist and working with a lawyer who understands cross-border transactions, you can buy with confidence and avoid major pitfalls.

If you’re ready to start, explore our detailed guides on NRST and non-resident purchase requirements.