The Canada Revenue Agency said applications opened on May 13, 2024 for the purpose-built rental housing rebate, a federal GST/HST measure aimed at increasing rental supply.
The rebate provides a 100% rebate of the Goods and Services Tax, or the federal portion of the Harmonized Sales Tax, on qualifying new purpose-built rental housing. CRA said the housing can include apartment buildings, student housing, and seniors residences.
To qualify, a project generally has to meet the requirements for the GST/HST new residential rental property rebate and be a multi-unit residential complex with at least four private apartment units, or at least 10 private rooms or suites. At least 90% of the residential units must be held for long-term rental.
One important difference from the existing new residential rental property rebate is the absence of the,000 fair-market-value limitation per unit. That can matter for larger rental projects in higher-cost markets.
The timing rules are also central. CRA said the rebate is available for projects where construction began after September 13, 2023 and before 2031, and where the project will be substantially completed before 2036.
The measure can also apply to conversions of existing non-residential real estate, such as an office building, into a residential complex if the conditions are met. It does not apply to substantial renovations of existing residential complexes, because the policy is aimed at increasing housing supply.
Several provinces announced matching or similar relief for the provincial HST portion. CRA identified Ontario, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island, with Prince Edward Island applying its own limits and timing conditions.
Builders and owners considering the rebate need to line up the construction-start date, substantial-completion deadline, long-term rental use, unit mix, and provincial HST rules before applying. Those details determine whether the rebate changes the after-tax cost of a rental project.