Housing shortages have been plaguing the province as it continues to grow but there’s another initiative in the works that promises to help.
The Government of Saskatchewan has launched a new Corporate Income Tax (CIT) Rebate that is expected to add 10,000 new rental units to the province by the end of 2016. Funding for the new rebate is estimated at $34 million for the first five years of the program. 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 says.
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.
While this won’t solve all that ails the Saskatchewan housing industry it’s another step in the right direction to ensuring comfortable, affordable housing is an option for all of the province’s residents.