A complete analysis of the most common overseas buyers’ tax refund cases
Previously, we introduced what the foreign buyers tax is, who needs to pay it, and where in Canada you need to pay the 15% foreign buyers tax. However, in the actual operation process, when encountering specific problems, many people are still confused. So we summarized several of the most common cases and give you a detailed analysis in this video.
Case 1: Do I qualify for a tax refund if I have studied for 2 years or worked for 1 year after buying a house?
In fact, it is not that simple to understand. Because the tax bureau has strict regulations, that is, before you buy a house, or on the day of delivery, you must be a full-time student or have a full-time job, and then after the delivery of the house, you must meet the conditions of full-time study for 2 years or full-time work for one year to be eligible for tax refund.
Case 2: I was a full-time student before buying the house. One year after buying the house, I started working full-time. Do I meet the tax refund requirements?
Unfortunately, this situation does not meet the tax refund requirements. As we have mentioned in the first case, the tax bureau has strict regulations. If you were a full-time student before buying the house, you must be a full-time student for two years after the house is delivered to be eligible for a tax refund. Or, if you were working full-time before buying the house, you must continue to work full-time for one year after the house is delivered to be eligible for a tax refund. If these two statuses change after you deliver the house, you will not be able to apply for a tax refund.
Case 3: The school I attend is a 2-hour drive from the house I bought. Am I eligible for a tax refund?
This situation is quite special and there are certain risks in applying for it. It depends on how the tax bureau judges it. If you declare rental expenses during the period of owning the house, you may be denied a tax refund because you cannot prove that the house is your main residence.
Case 4: The house I bought is a pre-sale property. How should I pay the foreign buyer tax? How can I apply for a tax refund?
Generally, for properties that are transferred, a 15% overseas buyer tax is paid on the final transaction price, and when a refund is received, the tax will be refunded based on the amount of tax you paid.
Case 5: After I bought a house, I rented out part of it for some reason. Can I still get a refund on the foreign buyers’ tax?
In this case, the tax cannot be refunded. Once the house is rented out in any form, the tax refund will be lost. This needs everyone to pay attention.
Case 6: If I do not move in within 60 days after the house is delivered, will it affect the tax refund?
Yes, it will have an impact. Because the tax bureau stipulates that when applying for a tax refund, you need to submit proof of occupancy within 60 days after the delivery date, such as: driver's license change of address proof, changed bank statement, car insurance change of address proof, moving receipt, etc. Therefore, it is best to move in within 60 days after the delivery of the house, and collect and keep the above documents to avoid unnecessary trouble.
Case 7: I am an international student. My parents guaranteed me to get a bank loan to buy a house, but my name is the only one on the property certificate. Can I apply for a refund of the NRST foreign seller tax?
If your parents guarantee you and only your name is on the property certificate, then your possibility of a tax refund will not be affected. However, if your parents' names appear on the property certificate, even if they only account for a small proportion, you will not be able to get a tax refund.
Case 8: My husband and I have been working and living in China. My husband is a Canadian citizen and I have always been a Chinese citizen. Now we want to invest in a Canadian property. Do we need to pay foreign buyer tax?
Canadian citizens or permanent residents who jointly purchase a property in Ontario with their foreign spouse can be exempted from the 15% foreign buyer's tax. In this case, there is no need to pay the tax, because as long as one of the spouses is a Canadian citizen or permanent resident, they are exempt from the foreign buyer's tax.
Case 9: I am a Chinese and plan to start a company in Canada. I have my eyes on an office building and would like to use it as a commercial office. Do I need to pay the foreign buyer’s tax?
If the property you buy is for commercial purposes such as office buildings, factories, farms, etc., and is not for your own residence, then you do not need to pay the foreign seller tax.
Case 10: I am applying for immigration. At which stage can I avoid paying Ontario’s foreign buyers’ property tax?
If you have received a provincial nomination letter from the Ontario Immigration Department before buying a house, you are exempt from paying the 15% Ontario foreign buyer's tax. However, if you have already paid it, you can apply for a tax refund after the house is delivered and you obtain permanent residency.
Case 11: I just graduated and found a full-time job in Toronto, but I haven’t obtained Canadian permanent residency yet. Recently, my parents gave me the down payment to buy a house. Can I apply for a tax refund?
In this case, if only your name is written on the property certificate, and you can prove that the money your parents gave you was a gift, you can apply for a tax refund. In this case, if only your name is written on the property certificate, and you can prove that the money your parents gave you was a gift, you can apply for a tax refund.
