Full GST Rebate for New Rental Developments Focused on Strengthening Canada's Housing Stock
2 min read.
In a remarkable policy shift, the federal government of Canada has taken a substantial step toward addressing the housing crisis by announcing a full Goods and Services Tax (GST) rebate for new rental developments. Finance Minister Chrystia Freeland introduced legislation promising a 100% GST rebate for these developments, a move that has widespread support from housing experts, advocates, and developers. This initiative is anticipated to boost the growth of purpose-built rentals, offering hope in the battle for affordable housing.
The significance of this GST rebate cannot be overstated, as it levels the playing field for rental developers. Unlike retailers who can pass on sales tax costs to their customers, rental developers have traditionally shouldered this financial responsibility. Stephen Cooper, CEO of Dream Unlimited, explains, 'When you build an apartment, the person paying the rent doesn't pay sales tax. It makes many apartments uneconomical.' This new rebate removes this financial impediment, making the construction of rental properties a more viable option.
The Canada Mortgage and Housing Corporation (CMHC) estimates that the nation needs to construct approximately 3.5 million more housing units by 2030 to restore affordability. The housing crisis is not the result of a singular cause but rather the culmination of inadequate efforts by various parties and levels of government over the past decades.
The 100% GST rebate for new rental developments is a game-changing policy. Coupled with potential future actions, it signifies a genuine commitment to resolving the housing crisis and ensuring that all Canadians have access to affordable and quality housing.
Reference
Mallees, N. A. (2023, September 26). Developer says it’s moving to build 5,000 rental units because of Liberals’ GST break. CP24. https://www.cp24.com/news/developer-says-it-s-moving-to-build-5-000-rental-units-because-of-liberals-gst-break-1.6577691
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