Province to follow federal lead, remove 10% of HST on new rental builds in P.E.I.
CBC
The Prince Edward Island government is removing the provincial portion of the HST for new rental builds, hoping to help spur new developments and address the demand for housing on the Island.
The move follows a federal government announcement on Sept. 21 that it was introducing legislation to remove GST (goods and services tax) charges from new rental developments. That brought calls for provinces to do the same thing with the remainder of the harmonized sales tax, or HST.
The P.E.I. government announced on Tuesday that it was going ahead with plans to rebate its share of the HST.
The rebate will be applied to tax on qualified rental housing projects up to a maximum of $35,000 per unit. It will be capped to apply to the first $350,000 in value per unit.
Construction must have started on or after Sept. 14, 2023, and must be completed by the end of 2028 to receive the full rebate.
Projects that reach completion after 2028 will qualify for only a portion of the rebate until 2035.
The program is aimed at adding new apartments to the housing market by lowering the the cost of new construction, Housing, Land and Communities Minister Rob Lantz said on Tuesday.
"We've got an extremely low vacancy rate here in the rental market and this is designed to jumpstart development and housing starts in the rental sector."
The program will be reviewed in three years to determine if it is addressing housing challenges P.E.I., the government said.
The province said it intends to harmonize the program with the federal government's rebate to streamline the application and administration process for builders and landlords.
The apartment vacancy rate on P.E.I. has been very low for years, falling to under one per cent in 2022. The lack of available units has been accompanied by rising rents, putting extra pressure on people looking for housing.
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