Province removing the full provincial portion of HST on qualifying new purpose-built rental housing
with information from the Government of Ontario (Ontario.ca)
MILTON, ON, NOVEMBER 2, 2023 — The Ontario government is taking steps to remove the full eight per cent provincial portion of the Harmonized Sales Tax (HST) on qualifying new purpose-built rental housing in order to get more rental homes built across the province.
The removal of the provincial portion of the HST would apply to new purpose-built rental housing such as apartment buildings, student housing and senior residences built specifically for long-term rental accommodation, that meet the criteria. The enhanced rebate would apply to qualifying projects that begin construction between September 14, 2023 and December 31, 2030, and complete construction by December 31, 2035.
At the recent Halton Regional Housing Roundtable held in September, The Oakville, Milton and District Real Estate Board called on representatives from all levels of government to remove barriers to building more purpose-built rental housing in the Halton Region. The province has called on the federal government to remove the HST for certain purpose-built rental housing, which they have agreed to do. Together, the provincial and federal actions would remove the full 13 per cent HST on qualifying new purpose-built rental housing in Ontario, helping to get more housing built. OMDREB welcomes the federal and provincial governments' decision to remove HST entirely.
- Currently, the Ontario HST New Residential Rental Property Rebate is equal to 75 per cent of the provincial portion of the HST paid, up to a maximum rebate of $24,000. The enhanced rebate would be equal to 100 per cent of the provincial portion of the HST, with no maximum rebate amount.
- In the example of a two-bedroom rental unit valued at $500,000, the enhanced Ontario HST New Residential Rental Property Rebate would deliver $40,000 in provincial tax relief. When combined with the enhanced federal GST New Residential Rental Property Rebate, this would amount to $65,000 in tax relief.
- To qualify for the enhanced HST New Residential Rental Property Rebate, new residential units must be in buildings with at least four private apartment units or 10 private rooms or suites, and have at least 90 per cent of residential units designated for long-term rental.
- Eliminating or reducing tax disincentives to housing growth is a recommendation in the Housing Affordability Task Force report.
For more information, click here.