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Which Rental Properties Qualify for the GST/HST New Residential Rental Property Rebate?

Canada Housing Starts Drop

You generally pay the goods and services tax/harmonized sales tax (GST/HST) when you purchase a new or substantially renovated residential rental property from a builder. If you are the builder of a residential rental property, or if you make an addition to a multiple-unit residential rental property, you are generally considered to have made a self‑supply and to have paid and collected tax on the fair market value of the rental property or addition at the time that you lease or occupy the first unit of the property as a place of residence (see What is a self-supply?).

As a residential landlord, you cannot claim an input tax credit (ITC) to recover the GST/HST paid or payable on the purchase of a residential complex or that you accounted for on the self‑supply of the complex because long‑term residential leases are exempt from GST/HST. However, you may be eligible to claim the new residential rental property (NRRP) rebate for some of the GST or the federal part of the HST if you:

  • paid the GST/HST on the purchase of a newly constructed or substantially renovated residential complex or an interest in the complex and you lease the complex or units in the complex to another person for residential use by an individual;
  • are a builder and you paid or accounted for the GST/HST on the self-supply of a residential complex or an addition to a multiple unit residential complex that you lease to another person for residential use by an individual(s);
  • are a builder and you paid or accounted for the GST/HST on the self-supply of a residential complex or an addition to a multiple unit residential complex and you made an exempt sale of the building and an exempt long-term lease of the land under a single written agreement;
  • are a co‑operative housing corporation (co‑op) and you paid the GST/HST on the purchase of a newly constructed or substantially renovated residential complex or an interest in the complex from a builder and you lease units in the complex for long-term residential use;
  • are a co-op and you paid or accounted for the GST/HST on the self-supply of a residential complex or an addition to a multiple unit residential complex and you lease units in the complex for long-term residential use; or
  • paid or accounted for the GST/HST on the self-supply of land that you lease to another person for long‑term residential use by an individual(s).

If your residential rental property is situated in Ontario or British Columbia, in addition to the GST/HST NRRP rebate for some of the federal part of the HST, you may be entitled to claim a provincial NRRP rebate for some of the provincial part of the HST. All the definitions and most of the conditions and restrictions for claiming a GST/HST NRRP rebate apply for claiming the provincial rebates. The exceptions are noted in this guide. For more information, see Is your property situated in Ontario or British Columbia?

Restrictions

The NRRP rebate will not be paid in the following situations:

  • you are an individual who is entitled to claim the GST/HST new housing rebate for a newly constructed or a substantially renovated residential complex, whether the rebate is paid to you or credited to you by the builder; or
  • you are entitled to claim a rebate for land leased to a lessee who subleases the land for residential purposes.

If you are entitled to claim the public service bodies’ rebate, you are not entitled to claim the NRRP rebate for the GST or federal part of the HST.

Note
A public service body (PSB) in Ontario or British Columbia may meet the conditions for claiming both a provincial NRRP rebate and a provincial PSB rebate for an amount of HST that it paid. In this case, the PSB is entitled to claim either the provincial NRRP rebate or the provincial PSB rebate, whichever has the higher rebate rate.

Any amount of tax that you are entitled to recover by way of rebate, refund, or remission under any other law and any amount of tax that you are not required to pay or remit cannot be included in determining the amount of your NRRP rebate.

Generally, a selected listed financial institution may only apply for a rebate of the GST or the federal part of the HST. For more information, call 1-800-959-5525.

This information was made available to our client from:
http://www.cra-arc.gc.ca/E/pub/gp/rc4231/rc4231-e.html#P53_725

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