As its name implies, the GST/HST Residential Rental Property Rebate is for owners and landlords of new residential rental property. Typically, landlords are not able to claim any Good and Services Tax/Harmonized Sales Tax on their returns for amounts they paid or that were payable on the purchase of residential property. This is because residential properties are exempt from GST/HST. However, the Residential Rental Property Rebate may allow you to claim some GST and/or the federal percentage of HST.
Qualifying for the New Residential Rental Property Rebate
The first people to occupy the new residential rental property must be tenants; the first occupants cannot include the landlord. This means you cannot purchase a property and live in it prior to renting it out, it must be tenant occupied from the start.
The rebate must be claimed with the Government — not obtained from the builder — by way of application to the Canada Revenue Agency after closing on the property.
To qualify, you must:
- Have paid the GST/HST on a purchase of a new or substantially renovated housing complex in a residential building.
- Be a builder who paid or accounted for the GST/HST on the self-supply of a residential complex or paid for an addition to a multiple unit residential complex that you lease to another person for residential use.
- Be a builder who has paid or accounted for the GST/HST on the self-supply of a residential complex or an addition to a multiple unit residential complex and made an exempt sale of the building and an exempt long-term lease of the land under a single written agreement.
- Be a co-operative housing corporation and that paid the GST/HST on the purchase of a newly constructed or substantially renovated residential complex or an interest in the complex from a builder and you lease units in the complex for long-term residential use.
- Be a co-op that paid or accounted for the GST/HST on the self-supply of a residential complex or an addition to a multiple unit residential complex and that leases units in the complex for long-term residential use.
- Have paid or accounted for the GST/HST on the self-supply of land that you rent or lease for long-term residential use.
Note that for qualification purposes, “self-supply” means that a builder constructed the residence and then sold it back or supplied it to himself, therefore self-supplied it.
How to Claim the NRRP Rebate
You can make an application within two years after the property closes or sells. All applicants must complete Form GST524, GST/HST New Residential Rental Property Rebate Application.
Depending on the specific situation under which you qualify, you may need to complete additional forms and applications. Send all of these applications to the CRA along with any supporting documents that the forms request.
If you receive the rebate and then sell the residence within one year, you may have to repay the rebate unless you sell it to a person who occupies it as his principal residence.
For more information about rental income, visit this TurboTax link.