You Broke an Election Promise, Mr. Prime Minister

Landlords and tenants deserve equity in the taxation of rental housing compared to other investments, and other necessities. We desperately need new purpose-built rental housing if we have any hope of meeting the secure housing needs of current and future residents of British Columbia. To do this we must strip all superfluous costs.
The application of the Goods & Services Tax (GST) to the rental housing industry is one of the more punitive tax measures in existence and it is time for this to change as you promised during the 2015 election campaign Mr. Prime Minister. In the Liberal Party of Canada platform document it stated that “We will encourage the construction of new rental housing by removing all GST on new capital investments in affordable rental housing. This will provide $125 million per year in tax incentives to grow and renovate the supply of rental housing across Canada.”
Furthermore Mr. Prime Minister, in your November 12, 2015 Mandate Letter to Finance Minister Morneau you specifically stipulated that the Minister should “Remove the GST on new capital investments in rental housing and modernize the existing Home Buyer’s Plan to support Canadians impacted by sudden and significant life changes.” This clearly demonstrates that addressing GST as it pertains to rental housing went beyond a campaign pledge and into the administration of your government Mr. Prime Minister. It is time to implemented.
Under the current GST rules, a rental developer pays GST on the “self-supply” of purpose-built rental building when construction is completed. This means that while a rental developer intends to keep, manage, and operate the newly built purpose-built rental building rather than sell it, current GST rules require that they must pay GST on the market value of the property at completion “as if” they have sold it. This is essentially paying a sales tax on an artificial transaction that will never occur. This is ridiculous!  On a recent 41-unit purpose-built rental project LandlordBC studied, the impact of this punitive tax was in the order of 6% of hard costs and over 4% of hard and soft costs combined.  This additional tax ultimately negatively impacts renters and its time for you to deliver on your election promise Mr. Prime Minister.