Temporary Increase in the GST Rental Rebate

On September 21, 2023, the Department of Finance Canada tabled Bill C-56 proposing legislation to temporarily enhance the GST Rental Rebate for construction of specific rental housing. These measures will increase the GST Rental Rebate from 36% to 100%, and remove the phase-out thresholds for this type of housing.

Currently, for the construction of rental housing designated for long term rental, a partial rebate of 36% of the GST is provided for units valued at $350,000 or less. The rebate is on a sliding scale for homes valued between $350,000 and $450,000. The rebate does not apply to units valued at more than $450,000.

The Department proposes legislation amendments to increase the rebate rate from 36% to 100% for some rental housing. In addition, the phase-out thresholds will be removed. The rebate will apply to all rental housing, regardless of its value.

Public service bodies will also be able to access the increased rebate.