New Residential Rental Property Rebate: Landlord Rules in Canada

If you bought a new condo or house to rent out, the owner-occupier GST/HST rebate is not meant for you. A separate federal rebate may help landlords, but it has its own conditions and its own form.

This article explains the new residential rental property rebate (often called the NRRP rebate): who can claim it, how the amount is calculated, how it differs from the owner rebate and when it has to be repaid. Each property is different, so confirm the details with a lawyer or accountant.

This article covers Canadian federal tax law, which applies in every province.

Why the owner rebate does not fit a landlord

The new housing rebate for owners is limited to individuals buying a home as their own or a relation's primary place of residence. Partnerships and corporations cannot claim it. A recreational cottage or investment property does not qualify either.

A corporation that buys a new residential unit to rent out is not shut out of all relief. A corporation that is a purchaser and landlord, and is not a co-op, can claim the new residential rental property rebate on Form GST524 (Type 6) if the purchase was taxable and it is not the builder.

Who can claim the rental property rebate

A non-builder purchaser of a residential complex is entitled when tax first becomes payable, if the property includes a qualifying residential unit and the tax is not recoverable as an input tax credit.

• The unit must be self-contained.
• It must be held for exempt residential rental.
• Its first use must be as a primary residence for at least one year.
• The tax must not be recoverable as an input tax credit.

The rebate is for units leased or held for lease as residences. It uses fair market value, and it is not paid where the individual qualifies for the new housing rebate on the same housing.

How the amount is worked out

The formula is A × ($450,000 − B) ÷ $100,000. A is the lesser of $6,300 and 36% of the tax, multiplied by the unit's floor-space share in multi-unit complexes. B is the greater of $350,000 and the unit's fair market value.

You apply on Form GST524 within two years after the end of the month in which tax first became payable. Do not leave this to the last month.

When the rebate is not paid or must be repaid

• It is not paid for purchases of existing occupied rentals where no GST/HST was payable.
• It is not paid for units that are not self-contained or not held for exempt residential leases.
• It is not paid where the tax is recoverable under another law, or to public service bodies eligible for the public service body rebate for the federal part.
• If a non-multi-unit qualifying unit is sold within one year of first occupancy to a buyer who will not use it as a primary residence, the rebate must be repaid with interest at the prescribed rate less 2% per year.

Purpose-built rental housing is a separate matter. That rebate is 100% of the federal part with no fair market value phase-out, applies where construction or renovation begins after September 13, 2023 and before 2031 and is completed before 2036, and excludes condos, single units, duplexes and triplexes. It cannot be claimed together with the rental property rebate on the same property.

What to do next

• Confirm whether you are buying as an individual, a corporation or another entity, and whether you are the builder.
• Check that the unit is self-contained and will be held for exempt residential rental.
• Get an estimate of the unit's fair market value, since the formula depends on it.
• Note the month tax first became payable and calendar the two-year filing date.
• Confirm whether input tax credits are available, since the rebate does not apply where tax is recoverable.
• Plan around any resale in the first year after occupancy.

Rental structures, multi-unit buildings and assigned agreements add complexity, and provincial rules can differ, so a lawyer or accountant can confirm which rebate fits before you close.

Frequently asked questions