Canada: Finance announces plan to increase GST rebate on new rental apartments

Draft legislation has not yet been released.

Draft legislation has not yet been released.

The Department of Finance announced that a new temporary rebate would essentially remove the goods and services tax (GST) (and federal portion of the harmonized sales tax (HST)) on qualifying new rental apartments.

The new enhanced rebate, which is intended only to apply to certain new buildings started before 2031, would essentially increase the GST rebate for certain newly built residential rental properties to 100% (from 36%) for qualifying buildings for which construction started after 13 September 2023.

Draft legislation for this change has not yet been released, but builders may review Finance’s announcement to determine if any of their upcoming new rental developments may qualify for the proposed new enhanced GST rebate. 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).

Read a September 2023 report [PDF 195 KB] prepared by the KPMG member firm in Canada



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