Ontario Regional Opportunities Investment Tax Credit
The Ontario Regional Opportunities Investment Tax Credit (OROITC) was introduced on March 25, 2020 providing a refundable tax credit for corporations that invest more than $50,000 to construct, renovate or acquire eligible commercial and industrial buildings in designated regions of Ontario, including Windsor-Essex.
Corporations are eligible if the are Canadian controlled private corporations, have a permanent establishment in Ontario, and make an investment in the designated region of Ontario. Only one corporation in the associated group is eligible to claim this credit annually.
To qualify for the tax credit, the corporation must acquire, construct or renovate commercial or industrial building(s) (i.e. not a residential building) in the designated region and have the property become available for use in the tax year. The credit is calculated based on the total expenditures to acquire, construct or renovate a commercial or industrial building(s) that exceed $50,000 with a limit of $500,000.
Presently the rate at which the tax credit is calculated is 20%, meaning that if you have expenditures over $500,000 you would get a refundable tax credit of $90,000. This enhanced tax credit is only available for investments that are acquired and become available for use by the end of 2023. After 2023, the tax credit will be reduced to 10% of the expenditures, meaning that if you have expenditures over $500,000 you would get a refundable tax credit of $45,000
If you are in the market to acquire, construct or renovate a commercial or industrial building, there could be a significant incentive to complete the investment by the end of 2023 to maximize the potential tax credit.
If you have any questions about the tax credit, please refer to the link here or contact your Roth Mosey Advisor.