Beyond Bending Tell You How
The cost of renting a home or apartment can be quite high, especially in urban areas. However, the Canadian government offers a new residential rental property rebate to help offset some of these costs. This program offers a rebate on the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) paid by landlords who rent out new residential properties. If you are a landlord or a tenant, it is important to understand the guidelines and benefits of the new residential rental property rebate. In this blog post, we will provide a comprehensive guide that covers everything you need to know about this program.
What is the New Residential Rental Property Rebate?
The new residential rental property rebate is a program offered by the Canadian government to help offset some of the costs associated with renting new residential properties. This rebate applies to the GST and HST paid by landlords who rent out new residential properties. To qualify for this rebate, the rental property must meet the following criteria:
- The property must be a new residential property, meaning it has never been lived in before.
- The property must be rented out for residential purposes only.
- The rental agreement must be for a minimum of one year.
- The landlord must be the first person to rent out the property after it was built or substantially renovated.
If the rental property meets these criteria, the landlord can apply for a rebate on a portion of the GST and HST paid on the property. The amount of the rebate depends on the amount of GST and HST paid, as well as the fair market value of the property.
How Much is the Rebate?
The amount of the rebate depends on the amount of GST and HST paid on the rental property, as well as the fair market value of the property. The maximum rebate amount is $30,000.The following table shows the rebate amounts for rental properties with different fair market values:| Fair Market Value | Maximum Rebate Amount || —————– | ——————— || $350,000 or less| $6,300|| $350,001 to $450,000 | Gradual reduction from $6,300 to $0 || $450,000 or more | No rebate available |It is important to note that the rebate amount is based on the fair market value of the property at the time the rental agreement was signed.
How to Apply for the Rebate
To apply for the new residential rental property rebate, landlords must complete Form GST524, New Residential Rental Property Rebate Application. This form is available on the Canada Revenue Agency (CRA) website.In addition to completing the form, landlords must submit the following documentation:
- A copy of the rental agreement
- Proof of ownership of the property
- Proof of the GST and HST paid on the property
The application must be submitted within two years of the date the rental agreement was signed.
Benefits of the Rebate for Landlords
The new residential rental property rebate provides several benefits for landlords, including:
- Reduced costs: The rebate helps offset some of the costs associated with renting out a new residential property.
- Increased profits: Landlords can use the rebate to increase their profits or invest in other properties.
- Competitive advantage: By offering lower rental rates, landlords can attract more tenants and stay competitive in the rental market.
In addition, the rebate can also benefit tenants by allowing landlords to offer lower rental rates.
Important Notes to Keep in Mind
Here are some important notes to keep in mind regarding the new residential rental property rebate:
- The rebate only applies to new residential properties, meaning properties that have never been lived in before. It does not apply to residential properties that have been previously occupied.
- The rebate only applies to the GST and HST paid on the property. It does not apply to other taxes or fees associated with renting out a property.
- The rebate amount is based on the fair market value of the property at the time the rental agreement was signed. If the fair market value changes after the rental agreement is signed, the rebate amount does not change.
- The rebate can only be claimed once per property.
- Landlords must apply for the rebate within two years of the date the rental agreement was signed.
Conclusion
The new residential rental property rebate is a program offered by the Canadian government to help offset some of the costs associated with renting out new residential properties. This program provides several benefits for landlords, including reduced costs, increased profits, and a competitive advantage in the rental market. If you are a landlord or a tenant, it is important to understand the guidelines and benefits of the new residential rental property rebate. By taking advantage of this program, you can save money and stay competitive in the rental market.
