In a move to address housing shortages and incentivize construction of rental accommodations, the federal government has announced the effective removal of the goods and services tax (GST) on newly built rental properties. The transformational action, expected to enhance development of apartment buildings, student housing, and senior residences comes as part of new legislation in Bill C-56.
The information via Davies Ward Phillips & Vineberg LLP indicates that these changes were laid out in draft format on September 21, 2023. The primary purpose of these changes is to encourage developers to increase their efforts in constructing buildings specifically for long-term rental purposes. Industry observers point out that indirectly, this serves a crucial role in catering to the housing demand within the country.
Details of the tax rebate for rental property development are now part of the public record as they have been presented in bill C-56, and consequently, these are accessible for consultation and debate among legal and tax professionals.
As such, legal professionals serving corporate entities, especially those involved in real estate development, should prepare themselves for potential impacts from this legislative adjustment. The prospect of reduced tax burdens often prompts recalibration of corporate strategy, and this instance is likely no different.