Ontario eliminates provincial HST for new rental developments per the latest announcement by Ontario on November 1. The initiative will remain applicable to new rental housing built on purpose. These include student housing, long-term rental accommodations, and apartment buildings, provided that they meet all requirements.
According to the government, the increased rebate would apply to eligible projects with constructions beginning from September 14, 2023, to December 31, 2030. The construction must be completed by 31 December 31,2035.
To be eligible for the rebate, new residential buildings must comprise a minimum of four private apartment units or ten private rooms or suites. They must hold 90 percent of residential units for long-term rental purposes.
Ontario eliminates provincial HST for new rental developments – taking initiatives for making rent affordable
After the release of the Housing Action Plan in 2022, Ontario will be taking the latest steps to enhance the affordability rates. Presently, Ontario consists of the new Residential Property Rebate, equivalent to 75 percent of the total amount of the provincial HST. This indicates an amount of $24,000 at the maximum. The new planned rebate will be 100 percent of the provincial HST. This indicates no maximum amount.
For instance, a two-bedroom rental unit with a value of $500,000 will derive a provincial tax rebate of $40,000. In conjunction with the federal reimbursement of up to $25,000 provided by the recent Affordability and Housing Act, developers in Ontario may receive tax rebates of up to $65,000.
To reduce the pressure on available renters, Ontario also restricted yearly rental rises below the inflation rate. However, this is only applicable to units that occurred before November 2018.
Even if we talk about older units, landlords might increase the rent once a tenant moves out of the rental property. They might raise it as high as possible for the upcoming tenant in their first year.
Furthermore, those new immigrants from overseas might find it challenging to create a significant affordability hurdle. This is especially true if they’re seeking a new apartment for rent.
Ontario’s immigration
Rentals.ca is a prominent website for searching apartments and displays that eight cities in Ontario are among the top ten expensive cities for rental purposes. The government of Ontario expects that the rebate will assist builders in developing more budget-friendly rental units in Ontario. This province comprises the maximum percentage of newcomers compared to other Canadian provinces.
According to the Census data 2021, nearly 46.6 percent of Toronto’s population were newcomers. Desjardin’s recent report claims that this is not an adequate percentage of new immigrants to meet the existing demand. This implies that several young new immigrants and other talented individuals might not opt to settle in Ontario. As a result, the provincial economy might face long-term consequences.
Canadian immigration will increase
The Canadian population met its huge target of 40,000,00 individuals initially in 2023. This reflects an increase of more than one million individuals in one year. Furthermore, IRCC recently revealed the latest targets for the Immigration Levels Plan for 2024-2026. These yearly plans bring forth the immigration targets for the upcoming three years.
In 2025 and 2026, Canada anticipated to welcome 500,000 new permanent residents. This doesn’t apply to international students or temporary workers.
IRCC even released the latest Strategic Immigration Report. This report also dictates IRCC’s immigration targets and policies, which must be more detailed. The report must comprise stakeholder consultations. They must assist IRCC in aligning immigration figures with available infrastructures, including housing.
Lastly, the report also suggests the probability of establishing other immigration pathways for new immigrants. This implies experience in construction to expedite the housing construction further.
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