Frequently Asked Questions (FAQs)

Five-Point Plan to Increase the Availability of Affordable Housing

Point One: Provincial GST/HST Rebate on New Residential Rental Properties

Removal of the GST/HST on new purpose-built rental housing. This could potentially save developers hundreds of thousands of dollars depending on the size of the build.

What is eligible for the existing and enhanced GST/HST rental rebates?

  • The existing rebate applies to purchased or owner-built residential rental properties, including:
    • individually owned condominium units,
    • single-unit housing,
    • duplexes, triplexes,
    • housing co-ops, and
    • owned houses situated on leased land and sites in residential trailer parks.
  • The enhanced rebate applies to new purpose-built rental housing, such as:
    • Apartment buildings,
    • Student housing, and
    • Senior residences built specifically for long-term rental accommodation.

 What qualifies for the GST/HST rental rebates?

  • Qualifying new residential units would be those that qualify for the federal rebate and are in buildings with at least:
    • Four private apartment units (i.e., a unit with a private kitchen, bathroom, and living areas),
    • or at least 10 private rooms or suites (e.g., a 10-unit residence for students, seniors, or people with disabilities), and
    • Those that have ninety per cent of residential units designated for long-term rental.

What if you are looking to convert non-residential real estate like offices, would that scenario be eligible for the rebate?

  • Yes, projects that convert existing non-residential real estate, such as an office building, into a residential complex are eligible for the enhanced GST Rental Rebate, as long as they meet the required conditions.
  • Qualifying new residential units would be those that qualify for the federal rebate and are in buildings with at least:
    • Four private apartment units (i.e., a unit with a private kitchen, bathroom, and living areas),
    • or at least 10 private rooms or suites (e.g., a 10-unit residence for students, seniors, or people with disabilities), and
    • Those that have ninety per cent of residential units designated for long-term rental.

Are substantial renovations of existing residential complexes eligible for the rebate?

  • The enhanced GST and HST Rental Rebate will not apply to substantial renovations of existing residential complexes.
  • This is intended to stimulate new supply, not take supply off the market.

When will developers be able to avail of the enhanced GST Rental Rebate?

  • While legislation is required to implement the enhanced GST Rental Rebate, the rebate would apply to projects that begin construction on or after September 14, 2023, and on or before December 31, 2030.
  • Construction must be completed by December 31, 2035.

When will legislation be introduced to make these rebates effective?

  • On September 21, 2023, the federal government introduced Bill C-56, the ‘Affordable Housing and Groceries Act’, the first piece of government legislation introduced in the fall parliamentary sitting.
  • This legislation will see, among other thigs, the removal of the GST on new rental housing construction across the country.

 

Point Two: Housing Development Loan Program

A low interest financing program that will provide financing to assist in constructing purpose-built rental housing, including modular, or converting non-residential buildings into purpose-built rentals.

What is eligible for the loan program?

  • Purpose-built rentals of four or more units, including modular or conversion of non-residential buildings into purpose-built rentals (long-term rental accommodations).

What is the total amount of loans that will be available?

  • The province will provide up to $50 million by way of secured loans.

Who are eligible proponents?

  • The loan program is open to:
    • Non-profits,
    • Community-based/service organizations, and
    • The private sector.

What interest rate will be available for proponents?

  • For single development project costs (up to $6 million) a fixed interest rate at government’s cost of borrowing would apply at the time of the loan agreement.
  • For project costs that exceed $6 million, the Bank of Canada Prime Rate would apply.

What are the repayment terms for the loans?

  • While detailed program criteria are being finalized, loans will have an amortization period of 25 years.

When will this loan program be available?

  • Program details will be updated once applications are made available, anticipated in Winter 2024.

 

 Point Three: Unlock Surplus Government Land and Buildings

Use of available Provincial Government-owned land and buildings for construction or conversion for purpose-built rental housing, including modular.

 What is the unlocking surplus government land and buildings initiative?

  • This initiative is intended to offer surplus land and buildings considered suitable for housing development.

Who is eligible to access this surplus land and buildings?

  • Like the Housing Development Loan Program, this initiative is open to:
    • Non-profits,
    • Community-based/service organizations, and
    • The private sector.

How will proponents access opportunities for surplus land and buildings?

  • All government-owned surplus land and buildings are being assessed for housing potential, with a priority on regional hubs where there is high demand for housing.
  • As land sites and properties are identified, they will be made available through an open process.
  • Criteria is being finalized but expected to include, for example:
    • Project viability and sustainability,
    • Number of units, and
    • Ability and timeline to deliver.

How soon will initial opportunities become available?

  • All government-owned surplus land and buildings are being assessed for housing potential, with a priority on regional hubs where there is high demand for housing.
  • It is anticipated that initial Property Opportunity Notices will be available no later than January 1, 2024.

 

Point Four: Homeownership Assistance Program

A home ownership assistance program for first-time homebuyers with lower-to-moderate incomes who qualify for a mortgage to access the required downpayment to purchase a home.

What is the Homeownership Assistance Program?

  • The ability to save for a downpayment is often a barrier to achieve home ownership for low-to-moderate income households.
  • The program helps first-time homebuyers by offering:
    • A repayable loan to assist with the required down payment to purchase a home,
    • The program will also assist with closing costs of up to $1,500 to match the Federal First-Time Home Buyers’ Tax Credit.

Who is eligible for the Homeownership Assistance Program?

  • Applicants must be first-time homebuyers who meet the program criteria and other criteria for approval from a financial institution.
  • Applicants must have a total household income of less than $85,000 to qualify for the full loan.
  • Total household incomes up to $95,000 are also eligible based on a sliding scale of assistance.
  • The program is limited to the first 150 qualified applicants with applications anticipated to open on November 1, 2023. The program will be reassessed after the initial year.

 How much loan assistance can you receive?

  • Loan amounts are based on the maximum 5% of purchase price.
  • They are also subject to maximum purchase prices, established by the program:
    • $350,000 in St. John’s (Census Metro Area) and Labrador,
    • $300,000 in regional centres (Clarenville, Gander, Grand Falls-Windsor, Corner Brook and Stephenville and all communities within a 30 km radius),
    • $250,000 in the remainder of the province (Rural).

What are the terms of the loan?

  • Successful applicants would not be required to begin paying back this loan until five years after the purchase of a home.
  • Although, clients may choose to begin loan repayment earlier if they have the financial ability.
  • Interest rates will not increase in the first five years and the interest thereafter will not exceed the prime lending rate, minus one percent.

Can I select my own lender?

  • Yes, as long as the lender is an accredited lender with competitive mortgage interest rates and is willing to accept the downpayment loan as an eligible downpayment source.
Sliding Scale of Assistance
INCOME
LEVEL		 ST. JOHN’S AND
LABRADOR
Maximum Loan Amount*		 REGIONAL
CENTRES
Maximum Loan Amount		 RURAL
NEWFOUNDLAND
Maximum Loan Amount
<$85,000 $17,500 $15,000 $12,500
$86,000 $17,000 $14,500 $12,000
$87,000 $16,500 $14,000 $11,500
$88,000 $16,000 $13,500 $11,000
$89,000 $15,500 $13,000 $10,500
$90,000 $15,000 $12,500 $10,000
$91,000 $14,500 $12,000 $9,500
$92,000 $14,000 $11,500 $9,000
$93,000 $13,500 $11,000 $8,500
$94,000 $13,000 $10,500 $8,000
$95,000 $12,500 $10,000 $7,500

 

Point Five: Secondary and Basement Suite Incentive

A Secondary and Basement Suite Incentive, which will be a pilot project, whereby homeowners will be able to access a forgivable loan of 50 per cent of the cost of renovations, up to a maximum of $40,000 over five years.

What is the Secondary and Basement Suite Incentive?

  • The program will help create affordable rental housing within the existing housing supply.
  • It will provide financial assistance to homeowners to turn a portion of a homeowner’s primary residence into a suite for the long-term rental market.

Who is eligible for this program?

  • Homeowners who are turning a portion of their primary residence into a suite for the long-term rental market.
  • Income eligibility and eligible expenses are being finalized.

What financial assistance is available?

  • Homeowners can access a five-year forgivable loan of 50 per cent of eligible renovation costs, to a maximum of $40,000.
  • In return, over this five-year period, the homeowner would have to rent the unit at established below market rates for a minimum of five years.
  • Newfoundland and Labrador Housing Corporation will confirm compliance with this condition on an annual basis over the five years.

How much funding is available for this initiative?

  • Funding is available for the first 100 eligible applicants with implementation planned for January 2024.

What costs are eligible under this initiative?

  • Eligible costs include:
    • Architectural and design fees,
    • Structural modifications,
    • Electrical work,
    • Plumbing work,
    • Fixtures,
    • Building and trade permits,
    • Materials related to the approved construction, and
    • Contractor labour.

What are costs that are ineligible under this initiative?

  • Costs that are not included:
    • Extensions,
    • Conversions,
    • Repair or replacement of items for the homeowners, and
    • Labour costs for work completed by the homeowner.