Does commercial rent in Ontario attract HST, and who is responsible for paying it?
Yes. Commercial rent — rent for office space, retail premises, industrial buildings, and most other non-residential tenancies — is a taxable supply in Ontario. The landlord (if registered or required to be registered) must charge 13% HST on the rent and remit it to the CRA. The tenant pays the HST on top of the base rent.
The tenant, if it is a registered business using the rented space for commercial activities, can claim the HST paid as an input tax credit on its own HST return. In practice, for B2B commercial leases between registered businesses, HST is cost-neutral to the tenant over time — they pay it and claim it back.
Landlords who are not registered for HST (e.g., because their rental revenues are below $30,000) do not charge HST, but also cannot claim ITCs on expenses like renovations, maintenance, or professional fees. For commercial landlords, voluntary registration is often worthwhile to recover those input costs.
Triple-net lease structures do not change the HST treatment — the landlord still charges HST on all amounts due under the lease, including operating cost recoveries, unless a specific exclusion applies.
Key takeaways
- Commercial rent is a taxable supply — 13% HST applies in Ontario.
- The landlord collects HST from the tenant and remits it to the CRA.
- Tenants who are registered businesses can claim the HST as an ITC.
- HST applies to all lease charges, including operating cost recoveries.