Rental GST waiver eases financing costs
October 18, 2023
Rental complex in Edmonton, Alberta. | Submitted
The federal government has waived the goods and service tax (GST) on new rental construction, easing the pain of higher lending rates for rental developers offered via Canada Mortgage and Housing Corp.-insured loans.
The GST break, which amounts to about $25,000 on a $500,000 new rental apartment, is expected to boost rental construction in B.C. and across Canada.
Toronto-based Dream Unlimited credited the removal of the GST as key to its new campaign to build 5,000 rental apartments, with the first projects in Ottawa, Saskatoon and Calgary.
“What this legislation unlocks is our ability to get shovels into the ground quickly at a time when it’s never been more critical to build new homes,” said Michael Cooper, Dream’s president and CEO.
In B.C., PC Urban Properties is working with Fiera Real Estate, to bring 141 rental homes—including 12 townhomes—to South Vancouver by leveraging both the GST break and the City of Vancouver’s commitment to faster rental construction permits.
“Actions like the elimination of GST on new rental buildings and speed of approvals will help alleviate our housing crisis,” said Brent Sawchyns, CEO of PC Urban, who was a strong proponent for ending the GST on rental construction.
The GST waiver applies to projects that start construction between September 14, 2023, and December 31, 2030, and complete by December 31, 2035, providing support for projects in the planning process and development. Mark Goodman of Goodman Commercial Inc., Vancouver, welcomed the generous construction start times of seven years and completions within 12 years, but noted GST exemption for rentals was first promised by the Trudeau government back in 2015.