- The Department of Finance has announced a GST relief for new residential rental construction, potentially reducing friction between developers and the Canada Revenue Agency.
- The existing GST rebate for landlords will be increased from 36% to 100%, operating like a cancellation of the tax.
- The rebate applies only to buildings with at least four private apartment units or at least 10 private rooms or suites, with 90% of residential units designated for long-term rental.
- The rebate only applies to projects in respect of which construction begins on or after September 14, 2023, and sunset provisions require construction to begin before December 31, 2030, and complete before December 31, 2035.
- The value threshold in the existing rebate provision is eliminated, and the rebate only applies to the 5% GST and not the provincial portion of the HST in Ontario and the Atlantic provinces.
- The legislation will address questions and uncertainties generated by the announcement.
Source Thorsteinssons
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