Boost for Rental Housing
The federal government has taken a big step to help rental housing. On September 14, Prime Minister Justin Trudeau announced that new rental apartments won’t need to pay the Goods and Services Tax (GST) on construction costs. In simple terms, this means building new rental properties just got cheaper and more appealing.
Who Benefits?
This GST exemption applies to new purpose-built rental properties, including apartment buildings, student housing, and senior residences for long-term renters. The goal is to make it easier to build the housing families want.
Change in Plans
Interestingly, Prime Minister Trudeau had a similar idea back in 2015, but he dropped it, thinking other measures were better for housing. Things have changed since then. Rising global inflation has made construction more expensive, and the government believes this GST exemption will help.
Building for Tomorrow
The plan is clear: make it more appealing for builders facing higher costs. Federal housing minister Sean Fraser thinks it will encourage Canadian builders to construct more homes across the country, which will lower rental costs for regular Canadians.
Positive Reactions
Byron Chard, president and CEO of Chard Development Ltd. in Vancouver, agrees. He says rental construction is tough with all the government charges and rising costs. But with this tax break, more units can be built, helping the housing supply.
Patience Required
Renters might not see the benefits immediately; it could take up to four years. But Cynthia Jagger, who works with multifamily property sales, welcomes the exemption. She thinks it’s a step in the right direction, even if it took longer than expected. But she does ask when it will start and if there will be any restrictions. Also, the exemption is temporary, ending on December 31, 2030.
In Summary
While some questions linger, the GST exemption for new rental projects is definitely a positive move to make housing more accessible and affordable in Canada. Renters might need to wait a bit, but this change opens up new possibilities in rental construction. As the government aims to create a better environment for the housing Canadians need, the future looks brighter for rental housing.
Please contact Jared Gibbons, your local realtor, should you have any questions!