Eliminating GST for Builder/Developers:
On September 14, 2023, the Prime Minister announced that the government will introduce legislation to eliminate the GST for builders in order to incentivize construction of much-needed rental homes for Canadians.
The removal of GST will apply to new purpose-built rental housing, such as apartment buildings, student housing, and senior residences built specifically for long-term rental accommodation.
This new tax break enables developers/builders who are constructing a rental apartment, with the possibility they may not have to pay the GST or a part of the HST which can save them a lot of money.
However there are some rules. This tax break is for new buildings that start construction before 2031 and it only applies if construction begins after September 14, 2023.
Keep in mind, the exact rules for this tax break haven’t been written into law yet. Builders should keep an eye out for the official announcement from Finance to see if their new rental projects qualify.
One important thing to know is that Finance’s announcement does not appear to affect the current GST/HST rules for already newly constructed qualifying buildings, such as input tax credit claims and the GST/HST self-assessment rules, and does not address the provincial component of the HST (or the QST).
In the final analysis, builders might qualify for a major tax break for new rental apartments. B. Hoffmann & Associates Ltd. (BHA) will be reviewing the proposed rules once they become avaliable and what they will mean for builders.
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B. Hoffmann & Associates Ltd.: Your Indirect Tax Experts
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