- A landlord who buys a newly built or substantially renovated rental may recover part of the GST or the federal part of the HST, but none is available at a fair market value of $450,000 or more.
- Ontario adds a rebate of part of the 8% provincial part of the HST, which is available whatever the unit's fair market value.
- The Ontario enhanced rebate is reduced for units over $1.5 million and unavailable at $1.85 million or more.
If you are buying a new or substantially renovated unit to rent out, the HST can be a large cost. Two layers of rebate may reduce it: a federal one and an Ontario one.
The rules, amounts and start dates for the Ontario rebates have been changing, and older figures still circulate online. Treat this article as a map, and confirm current numbers with the CRA, an accountant or a lawyer before you rely on them.
The federal rebate
Under the federal GST/HST New Residential Rental Property (NRRP) rebate, a landlord who bought a newly built or substantially renovated rental property may recover part of the GST or the federal part of the HST. The rebate phases out, and none is available for a unit with a fair market value (FMV) of $450,000 or more.
The unit's first use must be as a primary place of residence, whether the tenant's or the owner's or a relation's, for at least one year, or an equivalent period for certain other arrangements.
Purpose-built rental housing
A separate rebate returns 100% of the GST or the federal part of the HST for eligible new purpose-built rentals. Construction must begin after September 13, 2023 and before 2031, and be substantially completed before 2036.
A multiple-unit complex needs at least ten residential units, or at least four units with a private kitchen, bath and living area. Also, 90% of the residential units must be held for exempt leasing.
Ontario's provincial part
In Ontario, a rebate of part of the 8% provincial part of the HST is available, subject to a maximum amount, whatever the unit's FMV. You can claim it even where the federal rebate is unavailable only because the FMV is $450,000 or more.
The Ontario enhanced rebate (Ontario ENRRP), together with the Ontario NRRP rebate, can give a combined rebate of up to 100% of the 8% provincial part. For a lease of building and land, the combined maximum is generally $80,000.
Because the enhanced rebate and its timing conditions have changed, check the current CRA guide rather than relying on an older number.
How price level changes the picture
| Unit FMV | What generally applies |
|---|---|
| Under $450,000 | Federal NRRP rebate may apply, along with the Ontario rebates |
| $450,000 or more | No federal NRRP rebate, but the Ontario NRRP rebate can still be claimed |
| Over $1.5 million and under $1.85 million | Ontario ENRRP is gradually reduced |
| $1.85 million or more | No Ontario ENRRP rebate |
What to do next
- Confirm whether your unit is newly built or substantially renovated, and get its fair market value.
- Plan for the one-year first-use requirement before you buy.
- Claim on Form GST524, and Form GST525 for co-op and multiple units.
- Apply within two years after the end of the month in which tax first becomes payable on the purchase.
- Ask an accountant or lawyer to confirm the current Ontario rebate rules for your construction timing.
Frequently asked questions
Is there a federal rebate if my unit costs $450,000 or more?
Not under the NRRP rebate. None is available for a unit with an FMV of $450,000 or more. The Ontario NRRP rebate can still be claimed in that case.
How much of Ontario's HST can I get back?
The Ontario NRRP rebate covers part of the 8% provincial part, up to a maximum amount. Together with the Ontario ENRRP, the combined rebate can reach up to 100% of that 8% part. For a lease of building and land, the combined maximum is generally $80,000.
Does the Ontario enhanced rebate apply to expensive units?
It is gradually reduced for units with an FMV over $1.5 million and under $1.85 million. None is available at $1.85 million or more.
How do I claim, and by when?
NRRP rebates are claimed on Form GST524, with Form GST525 for co-op and multiple units. A purchaser-landlord must apply within two years after the end of the month in which tax first becomes payable on the purchase.
Sources
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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