New Residential Rental and Purpose-Built Rental HST Rebate
Two rebates, wildly different amounts. The purpose-built rental rebate returns the full federal GST with no phase-out. The standard NRRP rebate caps at $6,300 federally. Work out which one applies and how long is left.
total rebate
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Which Rebate Applies
| Test | Requirement | Your Position |
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The Rebate, Line by Line
| Item | Basis | Amount |
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Purpose-Built Against the Standard Rebate
| Rebate | Federal | Ontario | Total |
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Deadlines and Filing
| Item | Requirement | Your Position |
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Points That Decide This
What to Do Next
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Disclaimer: The purpose-built rental housing rebate provides a rebate of 100% of the 5% federal portion of the GST/HST with no phase-out threshold, in place of the standard 36% new residential rental property rebate. To qualify, construction must generally have begun after 13 September 2023 and before 2031 and be substantially completed before 2036, and the building must contain at least four private apartment units, each with a private kitchen, bathroom and living area, or at least ten private rooms or suites, with at least 90% of the residential units held for long-term rental. Ontario has provided a matching rebate of the 8% provincial portion for qualifying purpose-built rental housing, removing the $24,000 cap that applies under the standard rebate; provincial treatment should be confirmed for the specific project. The standard new residential rental property rebate under section 256.2 is 36% of the federal portion to a maximum of $6,300 per unit, phased out between $350,000 and $450,000 of fair market value per unit and eliminated entirely above $450,000, together with 75% of the Ontario 8% portion to a maximum of $24,000 per unit. Where a builder constructs a residential complex and leases a unit to a first tenant, the self-supply rules in section 191 deem a sale and repurchase at fair market value, and HST becomes payable on that value. An application on Form GST524 must be filed within two years after the end of the month in which tax became payable. Figures here are indicative only, depend on the specific facts of the project, and should be confirmed before filing. This page is general information, not tax advice.
Two Rebates, and the Difference Is Enormous
Most corporate landlords know there is a rebate on new rental property. Far fewer know there are two, and that the newer one is worth several times the older one on anything above a modest value.
| Purpose-Built Rental | Standard NRRP | |
|---|---|---|
| Federal portion | 100% of the 5% | 36% of the 5% |
| Federal cap | None | $6,300 per unit |
| Phase-out | None | $350,000 to $450,000 |
| Ontario portion | Matching relief | 75% of the 8%, capped at $24,000 |
Above $450,000 per unit the standard federal rebate is nil. That is most new construction in the GTA, which means a project that misses the purpose-built tests gets no federal rebate at all and only the capped Ontario amount. The gap between qualifying and not qualifying is the single largest number on these files.
The Four-Unit Test Is the Whole Game
Purpose-built rental housing needs at least four private apartment units, each with its own kitchen, bathroom and living area, or at least ten private rooms or suites. At least ninety percent of the residential units must be held for long-term rental.
A corporation buying one pre-construction condo to rent out does not qualify, no matter how the purchase is structured. It falls back to the standard rebate, and above $450,000 that means nothing federally.
- Four private apartment units, each with a private kitchen, bathroom and living area
- Or ten private rooms or suites, which covers student and congregate housing
- Ninety percent held for long-term rental, so a building sold as condos does not qualify
- Construction started after 13 September 2023 and before 2031
- Substantially completed before 2036
The private kitchen, bathroom and living area requirement is stricter than “unit”. Rooming arrangements and units sharing a kitchen count under the ten-room test rather than the four-unit test. Which test a project falls under is worth settling early, because it changes the design.
Self-Supply Catches Builders Who Rent Instead of Selling
Where a builder constructs a residential complex and leases a unit to the first tenant rather than selling it, section 191 deems a sale to itself and a repurchase at fair market value. HST becomes payable on that value even though nobody bought anything.
That is the moment the rebate exists to offset, and it is why the two events belong on the same page. The self-supply creates the liability and the rebate reduces it. A builder who accounts for one and forgets the other has the worst of both.
Self-supply is triggered by the first lease, not by completion. Handing keys to a first tenant is the event. Builders who intended to sell, could not, and rented the units instead frequently trigger this without realising, and then miss the rebate deadline as well.
Two Years, and It Runs From an Odd Date
The GST524 application is due within two years after the end of the month in which tax became payable. Not two years from closing, and not two years from the year end. Two years from the end of that month.
It is generous by CRA standards and it is absolute. A rebate not claimed in time is simply gone, and on an eight unit building that can be a six figure number walking out of the door because nobody diarised a date.
The Ninety Percent Residential Test
Mixed-use buildings need care. Ground floor retail under a residential block can push the residential share below ninety percent, and that affects qualification.
It is worth measuring properly rather than assuming, because the difference between eighty-nine and ninety-one percent decides whether the larger rebate applies at all. On a mixed-use project that measurement should happen at design stage, not at first occupancy.
What Landlords Get Wrong
- Assuming one rebate exists and claiming the smaller one out of habit
- Missing the self-supply entirely and then being assessed on fair market value
- Counting units rather than private units with kitchen, bathroom and living area
- Letting the two-year clock run while the project is still being finished
- Ignoring the ninety percent test on a mixed-use building
- Claiming on a single condo above $450,000 and getting nothing
Get the rebate determination done before the first tenant moves in, not after. Our real estate accounting service covers the self-supply calculation, the rebate application and the GST524 filing.
What This Calculator Does Not Cover
- Whether the property qualifies as a residential complex, which is a definitional question
- Input tax credits claimed during construction
- The fair market value itself, which usually needs an appraisal
- Substantial renovation, which has its own tests
- Short-term rental use, which changes the analysis entirely
- Provinces other than Ontario
Frequently Asked Questions
Common questions on the rental property HST rebates.
Related Calculators and Guides
More tools for corporate landlords and developers.
Settle the Rebate Before the First Tenant Moves In
Send us the unit mix, the construction dates and the appraisal. We will determine which rebate applies, calculate the self-supply, prepare the GST524 and file it inside the window.