Federal Government Enhances GST Rental Rebate

To help address a growing shortage of rental housing, the Canadian government announced, on September 14, 2023, an enhancement to the Goods and Services Tax Rental Rebate ("GST Rental Rebate"), commonly referred to as the landlord's rebate. The enhanced GST Rental Rebate will provide full relief for the 5% GST (or 5% federal component of the Harmonized Sales Tax ("HST")) paid by builders and purchasers of new "purpose-built rental housing" such as apartment buildings, student housing, and senior residences for use as a place of residence by individuals provided certain conditions are met.

Landlords that are builders of new residential housing are required to self-assess GST/HST, which is generally non-recoverable, on the fair market value of residential housing at later of the time of substantial completion and the building is first occupied. Alternatively, landlords that purchase new residential housing that has not yet been occupied by tenants are also required