If you have recently moved to Toronto and are looking to plant roots in neighborhoods like Etobicoke, North York, or the Downtown core, navigating the mortgage market without Permanent Resident (PR) status can be daunting. In 2026, Toronto remains one of the most regulated real estate markets in the world, with unique municipal layers on top of federal and provincial rules.
Here is exactly how the 2026 speculation tax regulations impact your Toronto home search and how you can still make homeownership a reality.
1. The Federal Level: The Foreign Buyer Ban Extension
The Prohibition on the Purchase of Residential Property by Non-Canadians Act has been extended until January 1, 2027. However, clients currently on work permits qualify under the “Temporary Resident” exemption.
- Work Permit Eligibility: You can buy one residential property in Toronto as your principal residence if your work permit has at least 183 days of validity remaining at the time of purchase.
- Principal Residence Rule: The home must be for you to live in; you cannot purchase a secondary investment property under this exemption.
2. The Provincial Level: Ontario’s 25% NRST
Even if the federal ban allows you to buy, Ontario’s Non-Resident Speculation Tax (NRST) is a major factor for non-PR buyers.
- The 25% Tax: As a non-PR, you must pay an additional 25% of the purchase price upfront at closing. On an $800,000 home, that’s an extra $200,000 that cannot be rolled into your mortgage.
- The PR Rebate: If you officially receive your Permanent Resident status within four years of your closing date, you can apply for a full rebate of this tax (plus interest), provided the home has been your principal residence.
- OINP Exemption: If you are a nominee under the Ontario Immigrant Nominee Program (OINP), you may be exempt from paying this tax upfront—a massive advantage for those in the PR pipeline.
3. The Toronto Layer: 10% Municipal Speculation Tax (MNRST)
Effective January 1, 2025, the City of Toronto has introduced its own Municipal Non-Resident Speculation Tax (MNRST) to run alongside the provincial version.
- The 10% Rate: This new tax adds an additional 10% of the purchase price specifically for residential properties purchased within the City of Toronto.
- Combined Impact: For a non-PR buyer in Toronto, the combined speculation taxes (Provincial NRST + Municipal MNRST) now total 35% of the purchase price. For a $1 million property, this means $350,000 in speculation taxes alone due on closing day.
Strategic Advice for 2026 Toronto Buyers
Buying in Toronto without PR status is possible, but it requires significantly more liquid capital for closing costs than a standard purchase.
Expert Tip: Because the 35% combined speculation taxes cannot be financed within your mortgage, many buyers choose to wait until they receive their eCOPR (Confirmation of Permanent Residence). Once you have your eCOPR, you are treated as a PR for tax purposes, potentially saving you hundreds of thousands of dollars on closing day.
Sources & Verification
The information in this post is derived from the following official sources as of January 27, 2026:
- Federal: Department of Finance Canada – Extension of Ban on Foreign Ownership (Exemption details for work permits).
- Provincial: Ontario Ministry of Finance – Non-Resident Speculation Tax (NRST) Bulletin (25% rate and rebate criteria).
- Municipal: City of Toronto – Municipal Non-Resident Speculation Tax (MNRST) (10% rate and application).
Verification Notice: Information is current as of January 27, 2026. Tax rates and federal exemptions are subject to change. Always consult with a qualified Toronto real estate lawyer regarding your specific immigration status and tax liability.