Toronto will not likely have enough private apartment units available for rent throughout the upcoming years.[1] Furthermore, the rental rate on the available private apartment units will have sustained upward pressure, likely resulting in increased average rental rates.
Input Tax Credits Unavailable
In order to align the application of GST/HST to its purpose of being a tax on consumers, businesses can claim GST/HST paid in the course of commercial activity through the input tax credit system (“ITC”) set out in Excise Tax Act (the “ETA”). However, a business can claim ITCs only to the extent it pays GST/HST in the course of its commercial activity.[2]
Commercial landlords are able to claim ITCs because renting commercial property is a commercial activity.
However, residential landlords are unable to claim ITCs, because renting residential units is an exempt supply and therefore not a commercial activity. [3] Nonetheless, residential landlords must pay GST/HST on the goods and services they have purchased in developing and operating their properties.
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