On September 14, 2023, the Department of Finance announced new measures to provide GST relief for certain residential rental construction.  These measures are intended to significantly lower the cost for builders of residential rental units.  
Originally, the announcement of the enhanced new residential rental housing rebates applied to only the 5% federal component of GST/HST.  However, The Ontario government announced on November 1, 2023 that the enhanced rebates for properties in Ontario would also apply to the provincial portion of Ontario HST.    
The announcement stated that the relief measures are effective immediately.  Draft legislation has not yet been released but amendments to the Excise Tax Act are expected to be introduced.
Overview

• The relief is in the form of enhanced GST/HST new housing rebates for certain residential rental construction.
• Originally, the announcement regarding the enhanced rebates applied only to the 5% federal component of GST/HST that is self-assessed on the completion of residential rental construction.
• The enhanced Ontario HST rebate will be determined using the same guidelines as the federal rebate – with no maximum rebate amount.
• Effectively, the rebate will be increased to 100% of the Ontario HST that is payable on qualifying residential rental properties.
• The enhanced rebate applies to residential rental construction that begins at any time between September 14, 2023 and December 31, 2030, and is completed by December 31, 2035.

What projects qualify for the enhanced rebate
The enhanced rebates will apply to the following:

• Buildings where at least 90% of the units are designated as long-term rentals. This would exclude an apartment building where more than 10% of the units are sold as condominiums or used as short-term rentals.
• The construction of new residential units only and not substantial renovations of existing units. However, the conversion of an existing building from commercial to residential would qualify.  This is consistent with the goal of promoting the construction of new residential rental units.
• Qualifying residential buildings consisting of:
  • Residential rentals - at least four units;
  • Student rentals – at least ten units; or
  • Seniors rental housing – at least ten units.

Residential rental construction that does not fit into the above categories (such as a single residential home) will still be able to claim GST/HST rebates at the “regular” rate. 
Conclusion
Construction projects that qualify for the enhanced rebate will have a significant reduction of costs for landlords. 
The enhanced Ontario HST rebate amounts will be 100% of the GST/HST that is payable on qualifying residential rental projects with no maximum limit.