Developer to build 5K rental units, cites Liberals’ GST break as motivator
Global News
According the CMHC, Canada needs to build about 3.5 million more units than its current pace of building by 2030 to restore affordability.
A Toronto-based real estate company says it is planning to build 5,000 new rental units in urban centres across the country as a result of the federal government’s decision to eliminate GST charges on rental developments.
The CEO of Dream Unlimited Corp., Michael Cooper, says high interest rates and construction costs had put many projects on pause.
“A lot of projects that we had hoped to be able to start haven’t penciled out,” Cooper said.
But the federal government’s announcement that it would eliminate GST charges off rental developments – and the expectation that provinces would follow suit – has changed the calculation for Dream.
Finance Minister Chrystia Freeland introduced legislation last week that would provide a 100 per cent GST rebate for new rental developments. The measure has been called for by housing experts, advocates and developers who say more incentives are needed to spur purpose-built rentals.
Cooper says the full rebate is a game-changer because while retailers can pass on the cost of a sales tax to customers, rental developers have to pay the tax themselves.
“When you build an apartment, the person paying the rent doesn’t pay (sales tax),” Cooper said. “It makes a lot of apartments uneconomical.”
The announcement from the real estate company comes with a caveat: provinces would have to waive their sales taxes, too, and average interest rates would have to stay the same.
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