Builders may be eligible for a new temporary rebate that will essentially remove the GST (and federal portion of the HST) on qualifying new rental apartments. The new enhanced rebate, which is intended only to apply to certain new buildings started before 2031, essentially increases the GST rebate for certain newly built residential rental properties to 100% (from 36%) for qualifying buildings for which construction started after September 13, 2023.

Although draft legislation for this change has not yet been released, builders should review Finance’s announcement to determine if any of their upcoming new rental developments may qualify for the proposed new enhanced GST rebate. Note that Finance’s announcement does not appear to affect the current GST/HST rules for newly constructed qualifying buildings, such as input tax credit claims and the GST/HST self-assessment rules, and does not address the provincial component of the HST (or the QST).

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