Ministry of Finance announced Ontario's exclusion of new rental complexes from the regular sales tax.
The federal government originally revealed plans to exempt the general sales tax on new rental complexes in September, at which point the change was first pledged. The province announced then that it would closely collaborate with Ottawa to reduce its eight percent tax share. With both plans, Ontario's overall tax reduction for all new long-term rentals would reach 13%.
Thousands of houses that would not have been built have now become economically feasible and can go ahead in the future years thanks to the removal of the provincial part of the HST from qualified purpose-built rentals, said Municipal Affairs and Housing Minister Paul Calandra.
The province has been pushing for a year to persuade the federal government to eliminate its share of the HST for specific purpose-built rental housing. This is due to their aim of constructing 1.5 million homes by 2031 to accommodate the expected increase in population.
According to the province, new residential properties must be located in buildings with a minimum of four private apartments or 10 private rooms or suites to be eligible for the tax reduction. Additionally, at least 90 percent of these units must be designated for long-term rental purposes.
Newly constructed rental properties, such as flats, dorms for students, and senior homes, that are intended for long-term rental accommodation are eligible for the HST elimination. Construction on all eligible projects must start between September 14, 2030, and December 31, 2030, with completion scheduled by the end of 2035.
Resource: CBC News