GST/HST memorandum 19-3-9

November 2025

This memorandum cancels and replaces GST/HST Notice 336, Purpose-built Rental Housing Rebate.

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Tax Act (ETA), and all references to the Regulations are to the Real Property (GST/HST) Regulations. The information in this publication does not replace the law found in the ETA and its regulations.

If this information does not completely address your particular situation, you may wish to refer to the ETA or relevant regulation, or call GST/HST Rulings at 1‑800‑959‑8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1‑800‑567‑4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1‑855‑666‑5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. The GST/HST rates are those that were in effect at the time of publishing. For the list of all applicable GST/HST rates (current and historic), go to GST/HST calculator (and rates).

If you are uncertain as to whether a supply is made in a participating province, refer to GST/HST Memorandum 3-3-2, Place of Supply in a Province – Overview.

Table of Contents

• Overview
• Meaning of significant terms
• Background
  • GST/HST new residential rental property rebate
  • Provincial new residential rental property rebates in Newfoundland and Labrador and in Ontario
• Purpose-built rental housing rebate
• Prescribed property and conditions
  • When construction begins
  • Multiple unit residential complex
  • Addition to a multiple unit residential complex
  • Conversion to a multiple unit residential complex
  • Excluded renovated housing supply
• Rebate calculation
• Public service bodies
• Cooperative housing corporations
  • Proposed legislation
• Student residences
  • Proposed legislation
• Provincial purpose-built rental housing rebates
  • Time of construction
  • Rebate calculation
• How to apply

Overview

1. As a result of amendments to section 256.2 and the enactment of the Real Property (GST/HST) Regulations (Regulations), the purpose-built rental housing rebate (PBRH rebate) increases the GST/HST new residential rental property rebate (GST/HST NRRP rebate) from a current maximum of 36% to 100% of the GST or federal part of the HST paid or payable on the purchase or self-supply of certain purpose-built rental housing, with no reduction where the fair market value (FMV) of a qualifying residential unit exceeds $350,000.

2. Rental housing that does not qualify for the PBRH rebate may qualify for the GST/HST NRRP rebate where the conditions outlined in Guide RC4231, GST/HST New Residential Rental Property Rebate, are met.

Meaning of significant terms

3. Basic tax content of a property is defined in subsection 123(1) and generally means the amount of the GST/HST that was payable for the last acquisition of the property, and for any improvements made to the property since that last acquisition, less any amounts that were, or would have been, able to be recovered (for example, by rebate or remission, but not by input tax credits (ITC)). The calculation for the basic tax content takes into account any depreciation in the value of the property since it was last acquired (for example, when it was purchased or when it was last deemed to have been purchased, whichever occurred more recently).

4. Registrants may have to calculate the basic tax content of a property if they increase or decrease their use of the property in their commercial activities. Non‐registrants may have to calculate the basic tax content of real property if they file a rebate under section 257.

5. For more information on how to calculate basic tax content, refer to Guide RC4022, General Information for GST/HST Registrants.

6. Eligible purpose is defined in section 2 of the Regulations. Generally, a residential unit is held by a person for an eligible purpose if the person who owns, leases, or has possession of the unit as a purchaser under an agreement of purchase and sale, holds the unit for one of the following purposes:

• to make exempt supplies of the unit under long-term residential leases as described in section 5.1, 6.1, 6.11, or 7 of Part I of Schedule V
• to make exempt supplies of property or a service that includes giving possession or use of the unit to a person under a lease where the lease is intended to allow the unit to be used by an individual as their place of residence

7. Excluded equity housing supply is defined in proposed subsection 3.1(3) of the Regulations. Generally, an excluded equity housing supply of a residential complex is a taxable sale of the complex, an interest in the complex, or an addition to the complex, to a corporation and it is the case that, in respect of a residential unit in the complex, all of the following apply:

• The corporation supplies a share of its capital stock to a particular person
• The share gives the person the right to possess a residential unit or to enter into an agreement with the corporation for the lease of a unit that is, or is similar to, a proprietary lease
• If the person makes a subsequent supply of the share, there is nothing in the statute under which the corporation was incorporated, nor the corporation's charter, articles of association, by-laws, or contracts with its shareholders or members, to prevent the consideration for the share from exceeding the original consideration paid for the share

8. Excluded renovated housing supply is defined in section 3 of the Regulations. Generally, a taxable supply is an excluded renovated housing supply of a residential complex if the complex has been substantially renovated and one of the following applies:

• The taxable supply is a deemed sale under subsection 191(3) as a result of the substantial renovation and the complex was held or used as a residential complex immediately before the beginning of the substantial renovation
• The taxable supply is the sale of a residential complex to a person that is not a builder of the complex, or is a supply of an interest in the complex, and both of the following apply:
  • the complex has not been occupied as a place of residence or lodging since the substantial renovation was substantially completed
  • the complex was held or used as a residential complex immediately before the beginning of the substantial renovation

9. Multiple unit residential complex is defined in subsection 123(1) and means "a residential complex that contains more than one residential unit, but does not include a condominium complex". For the purposes of the GST/HST NRRP rebate, a multiple unit residential complex does not include a duplex.

10. Percentage of total floor space is defined in subsection 256.2(1) and, in respect of a residential unit forming part of a residential complex, or part of an addition to a multiple-unit residential complex, is calculated as the total square metres of floor space occupied by the unit divided by the total square metres of floor space occupied by all the residential units in the residential complex or addition.

11. Public service body is defined in subsection 123(1) and means "a non-profit organization, a charity, a municipality, a school authority, a hospital authority, a public college or a university".

12. Qualifying portion of basic tax content of property of a person, at a particular time, is defined in subsection 256.2(1), and generally means the portion of the basic tax content of the property that is attributable to the GST or the federal part of the HST.

13. Qualifying residential unit of a person, at a particular time, is defined in subsection 256.2(1) and generally means any of the following:

• a residential unit the person owns, co-owns, or leases or sublets from another person
• a residential unit the person has possession as purchaser under an agreement of purchase and sale
• a residential unit in a residential complex that the person leases or sublets from another person

14. In addition, a qualifying residential unit must meet all of the following conditions:

• The unit is a self-contained residence
• The person holds the unit to do any of the following:
  • make an exempt lease or sublease of the unit
  • make an exempt supply of property or a service that includes giving possession or use of the unit under a lease, licence, or similar arrangement entered into for the purposes of the unit's occupancy by an individual as a place of residence
  • make an exempt sale of the unit and an exempt lease of the land
  • occupy the unit as a primary place of residence as long as another unit situated in the same complex is a qualifying residential unit held for one of the purposes listed above
• The first use of the unit is or can reasonably be expected to be any of the following:
  • the primary place of residence of the person or a lessor (or a relation to the person or the lessor) for a period of at least one year (or for a shorter period if, after the shorter period, the unit is sold or leased to an individual who will occupy the unit as a primary place of residence)
  • the primary place of residence of an individual who will occupy the unit continuously for a period of at least one year (or for a shorter period if the unit is sold to another person for use as a primary place of residence of that person or a relation of that person, or taken by the person or lessor, or a relation of the person or the lessor, for use as their primary place of residence)
• If, after the first use, the person intends to occupy the unit or lease it as a place of residence or lodging to an individual who is a relation, shareholder, member, partner, or an individual with whom the person is not dealing at arm's length, the unit will be the primary place of residence of the person or that individual

15. If substantially all (90% or more) of the residential units of a multiple unit residential complex that contains 10 or more residential units meet the one-year occupancy requirement, then all of the residential units in the complex are considered to meet the one-year occupancy requirement.

16. Residential complex is defined in subsection 123(1) and includes a building or part of a building in which one or more residential units are located, along with areas that are reasonably necessary for the use and enjoyment of the building as a place of residence for individuals. These include:

• part of any common areas and other appurtenances to the building
• the land on which the building is situated
• the part of the land immediately adjoining the building

17. A residential complex generally does not include a building or that part of a building that is a hotel, a motel, an inn, a boarding house, or similar place.

18. Residential unit is defined in subsection 123(1) and means any of the following:

• a detached house, semi-detached house, rowhouse unit, condominium unit, mobile home, floating home, or apartment
• a suite or room in a hotel, a motel, an inn, a boarding house, or a lodging house, or in a residence for students, seniors, individuals with a disability, or other individuals
• any other similar premises or the part of such housing listed above that:
  • is occupied by an individual as a place of residence or lodging
  • is supplied by way of lease, licence, or similar arrangement as a place of residence or lodging for individuals
  • is vacant, but was last occupied or supplied as a place of residence or lodging for individuals
  • has never been used or occupied for any purpose, but is intended to be used as a place of residence or lodging for individuals

19. Single unit residential complex is defined in subsection 123(1) and means "a residential complex that does not contain more than one residential unit, but does not include a residential condominium unit".

20. For the purposes of the GST/HST new housing rebate and the GST/HST NRRP rebate, a single unit residential complex generally includes a multiple unit residential complex containing only two residential units (for example, a duplex).

21. A single unit residential complex generally includes other structures near or adjacent to the unit, such as a detached garage or shed. It also includes the land subjacent and immediately contiguous to the unit that can reasonably be regarded as contributing to the use and enjoyment of the unit as a place of residence.

22. Substantial renovation of a residential complex is defined in subsection 123(1) and generally means the renovation of the whole or that part of a building that forms a part of a residential complex to such an extent that at least 90% of the building or part, other than the foundation, external walls, interior supporting walls, floors, roof, and staircases that existed immediately before the renovation, has been removed or replaced if, after completion of the renovation, the building or part of the building is, or forms part of, a residential complex.

Background

23. A person that purchases a new residential rental property from a builder is liable for the GST/HST calculated on the sale price of the property. If the purchaser then supplies the units in the new residential rental property to individuals as places of residence under long-term leases, the supply of each unit is generally exempt. As a result, the purchaser (now landlord) cannot claim ITCs in respect of the GST/HST paid or payable on the purchase of the property. However, the purchaser/landlord may be entitled to claim a GST/HST NRRP rebate for some of the GST or federal part of the HST that is paid or payable on the purchase of the property.

24. Similarly, a builder that constructs a new residential rental property and then supplies the units to individuals as places of residence under long-term leases is deemed to have paid and collected the GST/HST on the FMV of the entire property (building and land) generally at the later of the time that the construction is substantially completed and the time when the first unit is rented (referred to in this publication as a self-supply).

25. If the builder supplies the units in the new residential rental property to individuals as places of residence under long-term leases, the builder/landlord is in the same position as the purchaser/landlord. The supply of each unit is generally exempt and, therefore, the builder cannot claim ITCs in respect of the GST/HST deemed paid at the time of the self-supply. However, the builder/landlord may be entitled to claim a GST/HST NRRP rebate for some of the GST or federal part of the HST that is paid or payable on the self-supply of the property.

GST/HST new residential rental property rebate

26. Generally, a person may be entitled to claim a GST/HST NRRP rebate in respect of a qualifying residential unit that forms part of a residential complex, where the person purchases, constructs, or substantially renovates the residential complex, or converts non-residential real property into a residential complex, for the purpose of leasing the unit for long-term occupancy as an individual's primary place of residence.

27. The GST/HST NRRP rebate is generally 36% of the GST or federal part of the HST paid or payable by a person on the purchase or self-supply of the residential complex, subject to a maximum amount of $6,300 for each qualifying residential unit that forms part of the residential complex. The GST/HST NRRP rebate is gradually reduced for qualifying residential units with an FMV between $350,000 and $450,000. No rebate is available for the GST or federal part of the HST if a unit has an FMV of $450,000 or more.

Provincial new residential rental property rebates in Newfoundland and Labrador and in Ontario

28. A person may be entitled to claim a provincial new residential rental property rebate (provincial NRRP rebate) for some of the provincial part of the HST that was paid or payable on the purchase or self-supply of newly constructed or substantially renovated rental housing situated in Newfoundland and Labrador or in Ontario.

29. For information on the provincial NRRP rebates, refer to Guide RC4231 and GST/HST Info Sheet GI-201, Harmonized Sales Tax Newfoundland and Labrador New Residential Rental Property Rebate.

Purpose-built rental housing rebate

30. A person may be entitled to claim a PBRH rebate for 100% of the GST or federal part of the HST paid or payable on the purchase or self-supply of certain purpose-built rental housing that qualifies for the GST/HST NRRP rebate, with no phase-out thresholds. Such housing must be prescribed property and meet certain conditions.

Prescribed property and conditions

31. The following types of residential complexes may be prescribed property (refer to paragraphs 38 to 40 of this memorandum for additional information) for purposes of the PBRH rebate:

• a new multiple unit residential complex
• an addition to an existing multiple unit residential complex
• a conversion of non-residential real property into a multiple unit residential complex

32. The construction of the complex or addition, or the construction or alteration necessary to effect the conversion, as the case may be, must begin after September 13, 2023, but before 2031, and be substantially completed before 2036.

When construction begins

33. Construction is generally considered to begin at the time the excavation work relating to the residential complex begins.

34. Construction is not considered to begin at any of the following times:

• signing a purchase and sale agreement
• demolition
• site and environmental testing
• plan development and finalization
• clearing, remediation, and reclamation activities
• issuance of permits
• contracting for the excavation
• road construction

35. The legislation for the PBRH rebate, in particular subsection 256.2(3.1), refers to when the construction of a residential complex or addition, or the construction or alteration necessary to effect a conversion to a residential complex, begins. The legislation does not refer to a particular builder.

36. The time when the construction begins generally depends on when the excavation begins, and not on who begins or completes the construction of the residential complex.

37. Where a builder begins construction of a residential complex but then ceases work, and construction is later resumed by either the same builder or a different one, whether continuing the original plan or using the existing work for a different type of complex, the construction is generally considered to have begun at the time of the initial excavation.

Multiple unit residential complex

38. A new multiple unit residential complex is prescribed property where both of the following conditions are met:

• The multiple unit residential complex includes 4 or more residential units and at least 4 of those units each contains private kitchen facilities, a private bath, and a private living area; or 10 or more residential units
• At least 90% of the residential units that form part of the multiple unit residential complex are held for an eligible purpose that includes making certain exempt supplies of the unit or for making exempt supplies that include giving possession or use of a unit to a person under a lease for occupancy as an individual's place of residence

Addition to a multiple unit residential complex

39. An addition to an existing multiple unit residential complex is prescribed property where all of the following conditions are met:

• The addition includes 4 or more residential units and at least 4 of those units each contains private kitchen facilities, a private bath, and a private living area; or 10 or more residential units
• At least 90% of the residential units that form part of the addition are held for an eligible purpose that includes making certain exempt supplies of the unit or for making exempt supplies that include giving possession or use of a unit to a person under a lease for occupancy as an individual's place of residence
• At least 90% of the residential units that form part of the multiple unit residential complex and the addition combined are held for an eligible purpose that includes making certain exempt supplies of the unit or for making exempt supplies that include giving possession or use of a unit to a person under a lease for occupancy as an individual's place of residence

Conversion to a multiple unit residential complex

40. Where a person converts non-residential real property, such as an office building, into a multiple unit residential complex, the residential complex is prescribed property where both of the following conditions are met:

• The multiple unit residential complex includes 4 or more residential units and at least 4 of those units each contains private kitchen facilities, a private bath, and a private living area; or 10 or more residential units
• At least 90% of the residential units that form part of the multiple unit residential complex are held for an eligible purpose that includes making certain exempt supplies of the unit or for making exempt supplies that include giving possession or use of a unit to a person for occupancy as an individual's place of residence

41. On September 13, 2023, the prescribed property must also have met all of the following prescribed conditions:

• It was in existence
• It was not in the process of being constructed
• It was not being used as a residential complex

Excluded renovated housing supply

42. The PBRH rebate is not available for the substantial renovation of an existing residential complex where the residential complex is an excluded renovated housing supply. Generally, a residential complex is an excluded renovated housing supply if the residential complex has been substantially renovated and it was held or used as a residential complex immediately before the beginning of the substantial renovation.

43. For purposes of the PBRH rebate, if any part of the residential complex that existed prior to the renovation is retained and incorporated into the new structure, the resulting residential complex will generally be an excluded renovated housing supply that is not eligible for the PBRH rebate.

Rebate calculation

44. The amount of the PBRH rebate for a qualifying residential unit is calculated as the total amount of the GST or federal part of the HST that is paid or payable on the purchase or self-supply of the multiple unit residential complex, multiplied by the unit's percentage of total floor space.

Public service bodies

45. A public service body may meet the conditions for both a PSB rebate and a PBRH rebate for the GST or federal part of the HST paid or payable on the purchase or self-supply of a multiple unit residential complex. In this case, a public service body may claim either the PSB rebate or the PBRH rebate. Generally, a public service body would claim the most beneficial rebate.

46. For more information on the PSB rebate, refer to Guide RC4034, GST/HST Public Service Bodies' Rebate.

Cooperative housing corporations

47. Currently, a cooperative housing corporation may be eligible for a PBRH rebate for 100% of the GST or federal part of the HST paid or payable on the purchase or self-supply of a multiple unit residential complex where the conditions for claiming the PBRH rebate are met. Where this is the case, the cooperative housing corporation is deemed not to be a cooperative housing corporation for the purchase or self-supply of the residential complex.

Proposed legislation

48. Proposed legislation would introduce a prescribed condition specific to cooperative housing corporations. Where a taxable supply of the residential complex is an excluded equity housing supply, it would not be eligible for a PBRH rebate.

49. It is proposed that the amendments be deemed to have come into force on September 14, 2023.

Student residences

50. Currently, a university, public college, or school authority that is established and operated otherwise than for profit generally does not qualify for the existing GST/HST NRRP rebate or the PBRH rebate for new student residences, in part, for the following reasons:

• The first use of a student residence is not typically for a period of at least one year and, therefore, it is not a qualifying residential unit
• The GST/HST self-supply rules do not apply to a university, public college, or school authority that constructs or renovates a residential complex or an addition to a residential complex primarily for the purpose of providing a place of residence for students

Proposed legislation

51. Proposed legislation would establish conditions for a university, public college, or school authority that is established and operated otherwise than for profit to qualify for the PBRH rebate when purchasing or constructing a new student residence, or converting non-residential real property into a new student residence.

52. Under the proposed legislation, there would be no requirement that the residential unit be first used as a primary place of residence and no restrictions on the length of residency. However, the unit would have to be a place of residence for students attending the institution. All other conditions for claiming the PBRH rebate would continue to apply.

Purchase of a new student residence

53. Where a university, public college, or school authority that is established and operated otherwise than for profit purchases purpose-built rental housing primarily for use as a student residence, the institution may be entitled to claim the PBRH rebate for 100% of the GST or federal part of the HST paid or payable on the purchase. The institution may also meet the conditions for a PSB rebate in respect of this purchase. In such a case, the institution may claim either the PSB rebate or the PBRH rebate, but cannot claim both.

Construction of a new student residence

54. Where a university, public college, or school authority that is established and operated otherwise than for profit constructs purpose-built rental housing primarily for use as a student residence, it may qualify for a PSB rebate for some of the GST or federal part of the HST paid or payable on the construction costs. A PSB rebate may also be available for the GST or federal part of the HST paid or payable on the costs incurred to convert non-residential real property into a student residence.

55. Although the institution is not subject to the self-supply rules for the construction of, or conversion into, student residences, the proposed legislation would allow the institution to claim the PBRH rebate as if the self-supply rules applied.

56. The amount of the PBRH rebate would not be based on a self-assessment. Rather, the amount would be based on the qualifying portion of the basic tax content, which is approximately equal to the federal part of the basic tax content of the property. As such, the PBRH rebate would generally be the amount of the GST or federal part of the HST paid or payable on the construction costs that was not recovered as a PSB rebate.

57. It is proposed that the amendments be deemed to have come into force on September 14, 2023.

Provincial purpose-built rental housing rebates

58. In general, where the conditions for the federal PBRH rebate are met, the Regulations provide for a provincial PBRH rebate for some or all of the provincial part of the HST for a multiple unit residential complex located in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, or Prince Edward Island.

Time of construction

59. In Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, generally construction of the residential complex or addition, or the conversion of non-residential real property to a multiple unit residential complex, must begin after September 13, 2023, but before 2031, and be substantially completed before 2036.

60. In New Brunswick, generally construction of the residential complex or addition, or the conversion of non-residential real property to a multiple unit residential complex, must begin after November 14, 2024, but before 2028, and be substantially completed before 2030.

Rebate calculation

61. In New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario the amount of the provincial PBRH rebate for a qualifying residential unit is calculated as 100% of the provincial part of the HST that is paid or payable on the purchase or self-supply of the residential complex, multiplied by the unit's percentage of total floor space.

62. The following table summarizes the provincial PBRH rebate for New Brunswick.

63. The following table summarizes the provincial PBRH rebates for Newfoundland and Labrador, Nova Scotia, and Ontario.

64. In Prince Edward Island, the amount of the provincial PBRH rebate for a qualifying residential unit is calculated as the lesser of a maximum amount, and a percentage of the provincial part of the HST that is paid or payable on the purchase or self-supply of the residential complex multiplied by the unit's percentage of total floor space. The rebate amount decreases each year where construction is substantially completed after 2028, and before 2036.

65. In Prince Edward Island, where construction is substantially completed:

• before 2029, the provincial PBRH rebate is the lesser of $35,000, and 100% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2029, the provincial PBRH rebate is the lesser of $31,500, and 90% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2030, the provincial PBRH rebate is the lesser of $28,000, and 80% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2031, the provincial PBRH rebate is the lesser of $24,500, and 70% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2032, the provincial PBRH rebate is the lesser of $21,000, and 60% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2033, the provincial PBRH rebate is the lesser of $17,500, and 50% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2034, the provincial PBRH rebate is the lesser of $14,000, and 40% of the provincial part of the HST multiplied by the unit's percentage of total floor space
• in 2035, the provincial PBRH rebate is the lesser of $10,500, and 30% of the provincial part of the HST multiplied by the unit's percentage of total floor space

66. The following table summarizes the provincial PBRH rebate for Prince Edward Island.

How to apply

67. To apply for the PBRH rebate, complete Form GST524, GST/HST New Residential Rental Property Rebate Application, and Form GST525, Supplement to the New Residential Rental Property Rebate Application – Co-op and Multiple Units. Both GST/HST registrants and non-registrants can go to Sign in to your CRA account to apply for the PBRH rebate electronically.

68. An application for a PBRH rebate must be filed within two years after the end of the month in which the GST/HST first becomes payable by the person.

69. For more information, go to GST/HST purpose-built rental housing rebate (PBRH rebate).

Further information