The Government of Saskatchewan launched a new Corporate Income Tax (CIT) Rebate that will help add 10,000 new rental units to the province by the end of 2016. This initiative is expected to increase the overall, purpose built rental market by 29 per cent.
“We heard consistently from the housing sector that the current corporate income tax structure is a barrier to the development of rental housing,” Social Services Minister and Minister responsible for Saskatchewan Housing Corporation June Draude said. “Our government has listened and, as a result, we introduced the Corporate Income Tax Rebate in the 2012-13 Budget. We are keeping our promises and we are proud that this measure will ultimately help more Saskatchewan people find safe, quality rental housing.”
The new tax rebate effectively reduces the provincial Corporate Income Tax (CIT) rate on a corporation’s eligible rental income from the 12 per cent general CIT rate to the two per cent small business tax rate. The tax rebate is earned each year for a period of up to 10 consecutive years after eligible residential units become available for rent and the eligible corporation submits the appropriate documentation to receive that year’s rebate.
Eligible rental housing must remain as rental housing for the duration of the rebate period. The non-refundable 10 year rebate will be provided to eligible corporations whose sole purpose is the rental of eligible newly developed multi-unit rental housing in Saskatchewan.
Projects can be located in either urban or rural communities across the province. Eligible rental housing must be newly constructed, multi-unit rental housing which can include:
New construction including modular construction (e.g. high and low rise apartments, town/row housing, etc.); and
Conversion of non-residential property to rental units (e.g. warehouse space conversion).
Qualifying multi-unit rental housing must consist of at least eight fully self-contained rental units, meaning that bathroom and kitchen facilities are available in the suite. Multi-unit assisted living projects for seniors are also eligible. Units registered under a building permit dated on or after March 21, 2012 and before January 1, 2014 may apply. Units must be available for rent on or before December 31, 2016.
Funding for the new rebate is estimated at $34 million for the first five years of the program.
Rebate acceptance is on a first come, first served basis. Applications for registering eligible new residential rental housing are available by visiting the Saskatchewan Housing Corporation website, calling toll-free 1-800-667-7567 or contacting the SHC office in Regina at 306-787-4177.
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.