Cheaper houses matter!
The federal government is removing the GST on the construction of new rental properties in an attempt to put a brake on skyrocketing rents in Canada.
To build more rental housing, the removal of GST will apply to new purpose-built rental housing, such as apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation.
This enhancement increases the GST Rental Rebate from 36% to 100% and removes the existing GST Rental Rebate phase-out thresholds for purpose-built rental housing projects.
The enhanced GST Rental Rebate will apply to projects that begin construction on or after September 14, 2023, and on or before December 31, 2030, and complete construction by December 31, 2035.
For a two-bedroom rental unit valued at $500,000, the enhanced GST Rental Rebate would deliver $25,000 in tax relief.
Projects that convert existing non-residential real estate, such as an office building, into a residential complex would be eligible for the enhanced GST Rental Rebate if all other conditions are met. Public service bodies would also be eligible to access the enhanced GST Rental Rebate.
The enhanced GST Rental Rebate will not apply to individually-owned condominium units, single-unit housing, duplexes, triplexes, housing co-ops, and owned houses situated on leased land and sites in residential trailer parks, but this housing would continue to qualify for the existing GST Rental Rebate where the conditions for the existing rebate are met.
To protect Canadian renters from renovations, the enhanced GST Rental Rebate will not apply to substantial renovations of existing residential complexes. This is intended to stimulate new supply, not take supply off the market.
Reference
