Federal Government Introduces a New Tax on Residential Property and Expands the GST Rebate on New Housing
On April 19, 2021, Deputy Prime Minister and Finance Minister Chrystia Freeland tabled in the House of Commons the Liberal Government’s first federal budget in more than two years, A Recovery Plan for Jobs, Growth, and Resilience (“Budget 2021”). To discourage the underutilization of Canadian housing by non-resident owners, Budget 2021 proposes a new national 1% annual tax, beginning in 2022, on the value of non-resident, non-Canadian owned residential real estate considered to be vacant or underused. The details of the proposed tax will be addressed through a consultation process. In addition, Budget 2021 proposes to relax the conditions for the GST rebate on new housing where two or more individuals buy a new home, effective after April 19, 2021. For a discussion of these tax measures as well as others in Budget 2021, please see McCarthy Tétrault's Budget 2021 Commentary.