The Regulations Amending the Real Property (GST/HST) Regulations (SOR/2025-76) introduce changes to the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) framework in Canada, specifically targeting new purpose-built rental housing in New Brunswick. These amendments stem from the federal government’s broader initiative to encourage rental housing construction by providing tax relief. The new regulations allow for a temporary 100% rebate of the GST or the federal component of the HST on eligible rental housing projects, which is part of the Enhanced GST Rental Rebate program.

This measure aligns with the Government of Canada’s ongoing efforts to increase the supply of rental units by making their construction more financially viable. The Government of New Brunswick has taken a complementary step by offering a temporary rebate of the 10% provincial component of the HST on new rental housing projects, effectively extending the benefits of the federal rebate to provincial taxation.

Given that the HST in New Brunswick is governed by the Canada-New Brunswick Comprehensive Integrated Tax Coordination Agreement (CITCA), federal regulations are necessary to implement this provincial initiative. The CITCA allows New Brunswick some flexibility in adjusting its provincial tax policy, including making changes to rebates related to new housing. The amendments under SOR/2025-76 are therefore designed to facilitate the administration of New Brunswick’s rebate through federal mechanisms.

The specific regulatory amendment replaces subsection 5(2) of the Real Property (GST/HST) Regulations, detailing how the rebate applies to qualifying residential complexes in New Brunswick. To be eligible for the rebate, the property must meet the criteria established for the Enhanced GST Rental Rebate. This means that construction must commence on or after November 15, 2024, and before 2028, with substantial completion occurring before 2030. The rebate applies to the tax paid on the purchase of qualifying residential complexes or additions to multiple-unit buildings. The calculation of the rebate is based on the total provincial tax paid, multiplied by the percentage of total floor space allocated to qualifying residential units. Furthermore, applications for the rebate must be submitted within two years from the date when the tax first becomes payable or deemed to have been paid. The regulations specify that New Brunswick’s previous provisions under section 47 of the New Harmonized Value-added Tax System Regulations, No. 2 will not apply to these qualifying housing projects.

The primary objective of these amendments is to ensure the proper implementation of New Brunswick’s tax rebate while maintaining consistency with federal and provincial tax coordination agreements. By enacting these regulatory changes, the federal government facilitates New Brunswick’s ability to offer tax relief on rental housing without requiring separate provincial administration.

Canada (SOR 2025-75) March 26, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.