Foreigners interested in Toronto’s booming real estate market are in for a rude awakening in 2026, however, as Toronto has implemented its very own 10% Municipal Non-Resident Speculation Tax, applicable to the purchase price of any real estate, and this is clearly directed at foreigners.
In essence, the 10% MNRST is Toronto’s way of telling foreigners to keep their hands off Toronto’s real estate.
One of the issues with this is that it is absolute, meaning that there is no grandfathering in place for contracts that have already been entered into. In many cases, real estate contracts are entered into years before the actual closing date, and in this case, with the 10% MNRST, nothing is being done for those contracts that have already been entered into. So, in essence, a foreigner who entered into a contract in 2022 to purchase a condo in the heart of Toronto in 2026 is now being hit with the 10% MNRST.
The impact of this is being felt in Toronto’s pre-construction market, where the 10% MNRST is making it even harder for foreigners to save for their Canadian dream homes, and this is being felt in the form of a funding requirement of between $80,000 and $200,000 for a pre-construction purchase, which is why assignment is becoming so popular, as foreigners are looking for ways to offload their contracts to domestic buyers in order to avoid this.
The proponents of the 10% municipal tax are saying that this is a tough policy, and it needs to be implemented in order to protect Toronto’s housing stock and use the MNRST funds to build affordable housing.
By 2026, the 35% total tax burden is already being felt in Toronto’s real estate market, and the message being sent to the international community is that Toronto’s real estate is for Toronto’s residents only, and participation is only being allowed for those residents who work and reside in Toronto.