GST/HST Technical Information Bulletin B-087 “GST/HST new residential rental property rebate” November 2001

Applying for the New Residential Rental Property Rebate

…Registrants may offset the amount of the rebate on their return when calculating the amount to be remitted and file the claim with their return.

When more than one person is eligible for the rebate, i.e., there is more than one eligible claimant in respect of the property, each person will be required to file an application for the portion of the rebate to which they are entitled.

12-month test

• the use as a primary place of residence by each such individual
• must be for a period of at least one year, although not necessarily under one lease (e.g., an individual could occupy a unit for one year under twelve consecutive monthly leases); or
• if the period is less than one year, the residential unit could still be a qualifying residential unit provided the unit:
  1. is sold to a recipient who acquires the unit for use as the primary place of residence of the recipient or a relation,
  2. is taken for use as the primary place of residence of the person or a relation, or
  3. is taken as the primary place of residence of a lessor of the complex or a relation of that lessor.

90% test for qualification of units

In general, the occupancy requirements set out in the definition of qualifying residential unit are applied on a unit-by-unit basis. In the case of large multiple unit residential complexes, i.e., 10 or more residential units, the entire complex is considered to meet the expected one-year occupancy test if substantially all of the units (90% or more) meet that test.

Sale of rental unit following claiming of rental rebate

A person who supplies a residential unit by way of lease may be entitled to the new residential rental property rebate where the unit is leased to an individual as a primary place of residence even if the person intends to sell the unit at the earliest opportunity. As provided in the definition of qualifying residential unit, if that sale is made to a recipient who acquires the unit as the primary place of residence of the recipient or a relation, the unit may still be a qualifying residential unit.

However, the rebate will have to be repaid with interest if:

• the rebate was paid in respect of a single unit residential complex or a residential condominium unit where both the complex or unit and the land were supplied by way of lease by the person,
• the complex or unit is sold to a purchaser who is not acquiring the unit for use as the primary place of residence of the purchaser or a relation of the purchaser, and
• the sale is within one year from the time it is first occupied as a place of residence after the construction or last substantial renovation of the unit was substantially completed.

This repayment of the rebate does not apply to deemed sales under section 183 or 184, that is, sales deemed to have occurred due to seizures or repossessions or acquired by insurers on settlement of a claim.

Coming into force

The new residential rental property rebate applies to construction, substantial renovations, conversions or additions to rental properties that were started after February 27, 2000. Generally, construction is considered to begin at the time the excavation work relating to the residential complex begins.