Ontario removing provincial portion of HST on new rental housing

The Ontario government is removing the 8 per cent provincial portion of the Harmonized Sales Tax (HST) on qualifying new rental housing across the province.

The announcement came from the Minister of Finance Peter Bethlenfalvy and Minister of Housing and Municipal Affairs Paul Calandra at a press conference Wednesday morning.

The removal will apply to new “purpose-built” rental housing such as apartment buildings, student housing and senior residences built specifically for long-term rental accommodations.

The province says the rebate would apply to qualifying projects under construction beginning between September 14, 2023 and December 31, 2030 with construction complete by December 31, 2035.

“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.

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“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.”

The provincial government has been calling on their federal counterparts to remove the HST on certain purpose-built rental housing since the fall of 2022.

Ontario officials say the joint move would remove the full 13 per cent of the HST on these specific builds and that they will be continuing to work closely with the federal government to implement the new measure.

Last month, the federal government announced that they would be removing Goods and Services (GST) on the construction on new rental apartment buildings.

The current Ontario HST New Residential Rental Property Rebate covers 75 per cent of this provincial portion, with a maximum rebate of up to $24,000.

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In order to qualify for the “enhanced HST New Residential Rental Property Rebate”, new residential units must be in buildings with at least four private units or 10 private rooms or suites and have at least 90 per cent of these units designated for long-term rentals.

These qualifications are equal to those for the current federal GST rebate for new rental housing.

“This measure will change the cost equation for a lot of projects and make even more student, seniors and long-term, purpose-built rental projects economically feasible.” said Dave Depencier, President of the Ontario Home Builders’ Association.

“In short, this will get more desperately needed housing built.”

The announcement comes one day before the Progressive Conservative government is expected to release their fall economic statement.

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