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Federal Government Updates - 09/18/2023

September 18, 2023

The Federal government has recently announced a few proposed tax changes that may be relevant to you. While the related draft legislation has not been released and there could be significant changes before the new rules become law, we wanted to provide you with an update on the information that is presently available.

CEBA (Canada Emergency Business Account) loan repayment extension
The Federal government has announced that they will be extending the repayment deadline for CEBA loans.

  • The repayment deadline for CEBA loans to qualify for partial loan forgiveness of up to 33% is being extended from December 31, 2023, to January 18, 2024.
  • For CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan by January 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024.
  • As of January 19, 2024, outstanding loans, including those that are captured by the refinancing extension, will convert to three-year term loans, subject to interest of 5% per annum, with the term loan repayment date extended by an additional year from December 31, 2025, to December 31, 2026 and will not be eligible for any loan forgiveness.
More details can be found here.

GST on New Residential Rental Property
The Federal government has announced that they will eliminate the GST on construction on certain new rental apartments (referred to as "Qualifying Units") by adjusting the GST New Residential Rental Property Rebate.
  • This enhancement increases the GST Rental Rebate from 36% to 100% and removes the existing GST Rental Rebate phase-out thresholds for purpose-built rental housing projects. The enhanced GST Rental Rebate will apply to projects that begin construction on or after September 14, 2023, and on or before December 31, 2030, and complete construction by December 31, 2035.
  • This essentially means you can save 5% GST on a new rental property build but still need to go through the process of self assessing and filing for a GST rebate. It appears the provincial portion of the HST would still apply.
Qualifying Units - Qualifying new residential units would be those that qualify for the existing GST Rental Rebate and are in buildings with at least:
  • Four private apartment units (i.e., a unit with a private kitchen, bathroom, and living areas), or at least 10 private rooms or suites (e.g., a 10-unit residence for students, seniors, or people with disabilities); and,
  • 90% of residential units are designated for long-term rental.
Restrictions - The enhanced GST Rental Rebate will not apply to the following:
  • Individually-owned condominium units, single-unit housing, duplexes, triplexes, housing co-ops, and owned houses situated on leased land and sites in residential trailer parks, but this housing would continue to qualify for the existing GST Rental Rebate where the conditions for the existing rebate are met.
  • To protect Canadian renters from renovictions, the enhanced GST Rental Rebate will not apply to substantial renovations of existing residential complexes. This is intended to stimulate new supply, not take supply off the market.
More details can be found here.

If you have any questions about how these proposals will impact you, please talk to your Roth Mosey Advisor

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