GST Rebates & Investing in New Construction Rental Property

December 24, 2009 by Benjamin Bach · 1 Comment

In January, a number of our clients are closing on new construction rental properties, mainly in Cambridge Ontario’s Maple Grove community (355 Fisher Mills Road, north of 401, at Hespeller Rd). A few of these clients are new Real Estate Investors, and were not aware that you could apply for a GST Residential Rental Property Rebate (link goes to the Revenue Canada site hosting the rebate application).

Most people know that there is no GST payable on residential resale properties, and that there are rebates when buying new construction to live in, but not that they may be eligible to claim a GST/HST rebate when buy a newly constructed rental property, or “substantially renovate” a residential rental. The property must be under $350,000 , and there is a partial rebate available if the fair market value falls between $350,000 and $450,000

From the Governement’s form:

“Use this form if you purchased or built a new residential rental property, substantially renovated a residential rental property, made an addition to a multiple unit
residential complex, converted a commercial property into a residential rental property, or leased land for residential purposes.
You have to send appropriate documents with your application (we accept photocopies). See the guide RC4231, GST/HST New Residential Rental Property
Rebate, for details. We may audit your rebate claim.”

You can find the form here: GST Residential Rental Property Rebate