Federal GST Removal on Purpose-Built Rental Units
- Federal GST Removal on Purpose-Built Rental Units
The federal government recently announced an enhancement to the Goods and Services Tax (GST) Rental Rebate on new purpose-built rental housing to encourage the construction of much-needed rental housing stock across the country. If passed, this action will contribute to greater affordability in the rental market, as the removal of GST will apply to new purpose-built rental housing. This includes apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation. Following the federal announcement, the provincial government has pledged to work with Ottawa to ensure Ontario’s portion of the HST is removed from purpose-built rental housing as soon as possible.
TRREB has been leading the call for action on housing supply and affordability. We are confident that this is a necessary measure to ensure that the Greater Golden Horseshoe Region will meet its housing supply targets and to establish the viability of more affordable housing projects that residents need.
The federal government provided additional details on what projects will qualify for the GST rental rebate in buildings with at least:
- Four private apartment units (e.g., a unit with a private kitchen, bathroom, and living areas), or at least 10 private rooms or suites (e.g., a 10-unit residence for students, seniors, or people with disabilities); and,
- Ninety percent of residential units are designated for long-term rental.
For example, the savings achieved by removing the federal GST from new purpose-built rental developments would amount to $25,000 of tax relief for a two-bedroom rental unit valued at $500,000.
If passed in legislation, the enhanced GST Rental Rebate will apply to projects that begin construction before December 31, 2030, and complete construction by December 31, 2035.
Province and City of Toronto Announce Working Group for “New Deal” Framework
The Government of Ontario and the City of Toronto have formed a working group tasked to identify a pathway for the city to achieve long-term fiscal stability and sustainability. The “new deal for Toronto” was jointly announced by Premier Doug Ford and Mayor Olivia Chow with a commitment to report back by the end of November 2023. Any agreement presented by the new deal-working group will be informed by several shared priorities, including the protection of frontline municipal services and no new taxes or fees on city residents.
TRREB is pleased to see collaboration between the province and the city. We echo the commitment to support the delivery of shared priorities, including building housing, public transit, and critical city infrastructure. Read the full Government of Ontario news release.