Friday, October 07, 2005


Goods and Services Tax (GST) on Property under Construction: the New Residential Rental Property Rebate.

In response to a recent post of mine published here in the Real Estate Chronicle on September 14, 2005 and entitled "The Goods and Services Tax (GST) and Real Estate: what You need to know" I have received two e-mails from readers. The first e-mail has to do with GST applicable to the purchase of property under construction. The second reader requests information on the new residential rental property rebate. I apologize if this post sounds a bit too technical, but it's just the nature of the subject matter being discussed. Here are the responses to both inquiries:
if you are the Purchaser of:

then you may be eligible for a GST residential rental property rebate if the complex qualifies for the rebate. In all cases the rebate applies to real property that is or will be used as residential real property for the first time. In fact, to be more specific

a qualifying residence includes:

In addition, in order to qualify for the rebate all the following conditions must be met:

  1. The unit is a self-contained residence.
  2. The person holds the unit to: a) make an exempt lease or sub-lease of the unit; or b) make an exempt sale of the unit and an exempt lease of the land; or c) occupy the unit as a primary place of residence as long as another unit situated in the same complex is leased to another person on an exempt basis.
  3. The first use of the unit will be - or can reasonably be expected to be: a) the primary place of residence of the person or a lessor who will occupy the unit continuously for one year; or b) the primary place of residence of the person or lessor who will occupy the unit continuously for less than one year if, after that shorter period, the unit is sold to someone who will occupy the unit as a primary residence; or c) if ninety percent or more of the residential units of a residential complex that contains ten or more residential units qualify for the rebate. In this instance, all residential units in the complex are considered qualifying residential units.

Are you eligible to claim the rebate? You may be if:

Finally, there are four different types of rebate applications.

I would like to thank these two readers for posing me these questions and trust the above post will be satisfactory. Additional information can be gather from the Canada Customs and Revenue Agency's website at . I also would like to invite all readers to submit questions online using the 'comments' section of this Blog. This way all requests will be publicized as well. You do not need to leave your e-mail address if you do not want to. As always, all questions will be answered.

I wish you a Happy Thanksgiving and, to all my American friends, a Happy Columbus Day.

Luigi Frascati

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