On September 14, 2023, the Department of Finance Canada announced a new measure to increase the supply of new housing on the rental market, in response to the current housing shortage.
GST rebate enhancement
The purpose of this legislative measure is to enhance the Goods and Services Tax (GST) rebate on residential rental property. It applies to new residential complexes built specifically for rental purposes.
This measure will increase the GST rebate for residential rental properties from 36% to 100%, and abolish the GST rebate phase-out thresholds for rental housing projects.
Exemption for NEW buildings
This new measure will apply to new residential buildings built specifically for rental purposes, such as apartment buildings, student housing and long-term rental residences for the elderly.
This enhanced reimbursement will apply to projects for which construction begins on or after September 14, 2023 and no later than December 31, 2030, and ends no later than December 31, 2035.
For example, for a two-bedroom rental unit valued at $500,000, the enhanced GST rebate for residential rental properties could mean a tax break of $25,000.
The enhanced GST residential rental property rebate will not apply to major renovations of existing residential complexes, condominiums, single-family homes, duplexes, triplexes, cooperative housing or homes on newly built leased land.
Coming into force today
The enhanced GST residential rental property rebate for purpose-built rental units comes into effect today.
An article by Sylvie Therrien
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