Qualifying Residential Unit

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The following residential units qualify for a GST and QST rebate (partial refund) for new rental residential complexes:

  • a unit your business owns, co-owns, leases or subleases;
  • a unit your business possesses under a sales contract; and
  • a unit located in a residential complex your business leases or subleases.

In addition, all the following conditions must be met:

  • The unit is a self-contained residence.
  • Your business holds the unit for one of the following purposes:
    • to make an exempt lease or sublease of the unit;
    • to sell the unit and make an exempt lease of the land;
    • to use the unit as its primary place of residence (provided it makes an exempt lease of another unit in the residential complex to another person).
  • The first use of the unit is or can reasonably be considered to be one of the following:
    • your business's primary place of residence, or the residence of a relation, for at least a year (or less, if, after that period, the unit is sold or leased to an individual who will occupy it as a primary place of residence);
    • the primary place of residence of a lessor or a relation of the lessor for at least one year (or less, if, after that period, the unit is sold or leased to an individual who will occupy it as a primary place of residence); or
    • the primary place of residence of an individual who will occupy it continuously for at least one year (or less, if, after that period, the unit is sold to an individual who will occupy it as a primary place of residence, or you, a relation, the lessor or a relation of the lessor will occupy the unit as a primary place of residence).
  • After the first use, you indend to occupy the unit or lease it to an individual who is a relation, shareholder, member or partner, or a related individual, and you can reasonably expect the unit to be used as the primary place of residence by your business or this individual.
Note

If the residential complex contains at least 10 residential units and substantially all (90% or more) of the units are qualifying residential units, all the units are considered to be qualifying residential units.

Important
  • If you own a business and you are the builder of a residential complex, you may be considered to be both the seller and recipient of the complex in the following cases:
  • You build a residential complex (or hire someone to build one) and then lease all or part of it.
  • You substantially renovate a residential complex (or hire someone to do the work) and then lease all or part of it.
  • You build an addition to a multiple-unit residential complex (or hire someone to build one) and then lease a unit in it.

You may therefore be deemed to have made a self-supply, in which case you will be required to remit the taxes, which will be considered to have been calculated and collected on the fair market value (FMV).

For more information on the self-supply rules, click Construction or Renovation of Residential Complexes.

For more information, see form FP-524-V, New Residential Rental Property GST Rebate Application, and form VD-370.67-V or VD-370.89-V, New Residential Rental Property QST Rebate (whichever version corresponds to your situation).

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