Ontario to drop HST on rental housing
By Adam FreillConstruction Residential
Inline with the federal GST removal, province is set to remove the provincial portion of HST on qualifying new purpose-built rental housing.
Aiming to get more rental homes built across the province, the Ontario government is taking steps to remove the full eight per cent provincial portion of the Harmonized Sales Tax (HST) on qualifying new purpose-built rental housing.
“There has never been a greater need to get rental housing built across the province. This is why our government is taking steps to tackle the housing crisis so that all Ontarians can have an affordable place to live,” said Peter Bethlenfalvy, Ontario’s Minister of Finance.
He says that the government will outline the specific details of its plan to remove its portion of the HST in the coming days, but his department confirmed that the removal of the provincial portion of the HST would apply to new purpose-built rental housing such as apartment buildings, student housing and senior residences built specifically for long-term rental accommodation, that meet the criteria. The enhanced rebate would apply to qualifying projects that begin construction between September 14, 2023 and December 31, 2030, and complete construction by December 31, 2035.
Ontario has called on the federal government to remove the HST for certain purpose-built rental housing since fall of 2022. Together, the provincial and federal actions would remove the full 13 per cent HST on qualifying new purpose-built rental housing in Ontario, which the province says will help to get more housing built.
“Our government will continue to take action and work together with our partners at all levels of government to help increase the supply of affordable homes across this province,” said Paul Calandra, Minister of Municipal Affairs and Housing. “This is a significant step that builds on the comprehensive measures in our government’s Housing Supply Action Plans to get shovels in the ground faster and help more Ontarians find a home that meets their needs and budget.”
As part of its ongoing work to build at least 1.5 million homes by 2031, the government is also working on the development of a comprehensive modular home strategy. This strategy includes exploring the use of a Request for Qualification process that will transparently identify and pre-qualify companies that contribute to modular housing construction on the scale Ontario needs. The government is also working to leverage surplus provincial lands and partnering with municipalities to leverage surplus municipal lands in order to help reduce the cost of building attainable homes, including modular homes.
“Ontario needs more purpose-built rental housing. Too often, high project costs mean that rental projects just don’t work financially,” stated Tony Irwin, president & CEO of the Federation of Rental-housing Providers of Ontario and interim-president of the Canadian Federation of Apartment Associations. “Today’s announcement will help put more shovels in the ground so we can build more rental homes, faster. Our members are thrilled with this announcement.”