Oakville’s luxury real estate market continues to attract international interest, offering a blend of exclusivity, lifestyle, and investment potential. However, recent regulations have made it more difficult for non-Canadians to purchase residential property in Ontario. With restrictions in place, buyers must navigate legal exemptions, taxes, and potential rebates to secure a home in this coveted area.
This guide explores who can buy real estate in Oakville, the fees and taxes involved, and how international students and work permit holders can legally purchase a home while maximising available tax refunds.
Current Regulations for Foreign Buyers in Canada
As of January 1, 2023, the Canadian government enacted the Prohibition on the Purchase of Residential Property by Non-Canadians Act, also known as the foreign buyer ban. This law restricts most non-Canadians from purchasing residential property in urban centres, including Oakville.
Who is Affected by the Ban?
- Non-Canadian individuals who are not permanent residents or citizens of Canada.
- Corporations controlled by non-Canadians.
- Trusts and partnerships with non-Canadian owners.
However, several exemptions allow foreign buyers to legally purchase real estate in Oakville.
Exemptions: Who Can Buy Real Estate in Oakville?
Certain foreign buyers are exempt from the ban and can legally purchase homes under specific conditions.
International Students
- Have filed income tax returns in Canada for each of the five taxation years preceding the year of purchase.
- Have been physically present in Canada for at least 244 days in each of the five calendar years preceding the purchase.
- The property price does not exceed $500,000.
- Have never purchased another property in Canada.
- Are enrolled in a full-time programme at a designated learning institution.
Even if a student qualifies, they must pay a 25% Non-Resident Speculation Tax (NRST) when purchasing a home. However, this tax may be refunded if they later become a permanent resident.
Work Permit Holders
- Have a valid work permit with at least 183 days remaining at the time of purchase.
- Work full-time in Canada.
- Have not purchased any other residential property in the country.
Like students, work permit holders must pay the 25% NRST when purchasing a home, but they can apply for a full refund if they work full-time in Ontario for at least one continuous year.
Refugees & Protected Persons
Individuals who have been granted refugee status under Canadian law are not subject to the foreign buyer ban and can buy property without restrictions.
The 25% Non-Resident Speculation Tax (NRST)
Even if an international buyer qualifies for an exemption from the foreign buyer ban, they are still required to pay the Non-Resident Speculation Tax (NRST) when purchasing a home.
- NRST Rate: 25% of the purchase price.
- Applies to: All residential properties in Ontario.
- Refund Available? Yes, for students and work permit holders if they meet the conditions.
Two Real-World Examples of Foreign Buyers in Oakville
To illustrate how international buyers can purchase property in Oakville while following Canadian regulations, here are two real-world scenarios.
Example 1: Buying a Home in Oakville as an International Student
- Selected Property: $500,000 condo in Oakville.
- NRST Tax: 25% of the purchase price = $125,000.
- Conditions:
- Must continue full-time studies in Canada.
- Must use the home as a primary residence.
- NRST Rebate Eligibility:
- If the student later becomes a permanent resident, a refund for the $125,000 tax can be applied for.
Outcome: The student successfully purchases the home, pays the 25% NRST, and applies for a tax refund upon obtaining permanent residency.
Example 2: Buying a Home in Oakville on a Work Permit
- Selected Property: $4,000,000 luxury home in Oakville.
- NRST Tax: 25% of the purchase price = $1,000,000.
- Conditions:
- Must work full-time in Ontario for at least one continuous year after buying the home.
- Must use the property as a primary residence.
- NRST Rebate Eligibility:
- After one year of full-time employment, a refund for $1,000,000 tax can be applied for.
Outcome: After fulfilling the work requirement, the buyer successfully applies for the NRST rebate and recovers the $1,000,000 tax. The family settles into their new home in Oakville, establishing long-term residency.
Key Takeaways for Foreign Buyers in Oakville
- Foreign buyers are banned from purchasing homes in Canada unless they qualify for an exemption.
- International students can purchase a home up to $500,000 but must have five years of tax filings and later obtain permanent residency to get a tax rebate.
- Work permit holders can purchase a home of any value and qualify for an NRST rebate after one year of full-time work in Ontario.
- The 25% NRST tax applies to all foreign buyers, but it can be recovered if certain residency or work conditions are met.
Understanding these rules allows international buyers to legally purchase property in Oakville while taking advantage of available tax rebates. With careful planning, Oakville remains an excellent option for those looking to invest in Canadian real estate.
Thinking of Buying Real Estate in Oakville?
Navigating foreign buyer regulations can be complex, but opportunities still exist for those who qualify. Whether you're an international student, a skilled professional, or an investor, working with an experienced real estate professional ensures compliance with Canadian laws and maximises your investment potential.
For expert guidance on buying luxury real estate in Oakville, contact us today.
