When you purchase or construct a new rental property, you're required to pay GST/HST on the property. If a builder constructs a rental property and leases out its units, they too must pay GST/HST on the property's value either when construction nears completion or when the first unit is rented out. Rental income from long-term residential leases is exempt from GST/HST, so the builder/landlord cannot claim Input Tax Credits (ITCs) for the GST/HST paid. However, they may qualify for a rebate on a portion of this GST/HST.

Overview of Rental Property Rebate:

1. GST/HST New Residential Rental Property (NRRP) Rebate: If you buy, build, or substantially renovate a residential property to rent out, you might get a rebate on some of the GST/HST you paid. This rebate is usually 36% of the GST or the federal part of the HST, capped at $6,300 per unit. If the unit is worth between $350,000 and $450,000, the rebate reduces gradually, and no rebate is available if the unit's value is $450,000 or more.

2. Ontario NRRP Rebate: In Ontario, there's a similar rebate for the provincial part of the HST, with a maximum of $24,000 per unit. This rebate is available regardless of the unit's value.

3. Purpose-Built Rental Housing Rebate (PBRH): A new temporary measure increases the rebate to 100% of the GST or the federal part of the HST for certain rental properties built specifically for long-term rental, with no reduction for units over $350,000. You can't claim both the NRRP rebate and the PBRH rebate for the same property.

New Measure – PBRH Rebate:

• Builders or buyers of new rental housing specifically for long-term accommodation may get a 100% rebate on the GST or the federal part of the HST. This applies to projects started after September 13, 2023, and completed before 2036.
• This rebate can be applied to rental units in new or expanded multi-unit buildings and if non-residential property (like an office) is converted into rental housing, given the conversion starts after September 13, 2023, and is done before 2036.
• The property must include at least 4 residential units with private facilities or at least 10 residential units, and 90% of the units must be held for long-term rental.
• The PBRH rebate is not available for condos, single-unit houses, duplexes, triplexes, or houses on leased land.
• It is also not available for a substantial renovation of an existing multiple unit residential complex.

For detailed information, you can refer to Canada Revenue Agency's Purpose-Built Rental Housing Rebate Guide.

If you have any questions or need assistance, feel free to reach out to us at PKF Antares Professional Corporation. You can contact us at 403-375-9955 or https://www.pkfantares.com/contact/. We're here to help!