GST/HST on Canadian Rental Income: Exempt, Taxable, and the Rules (2026)

Before anything else, separate two taxes that share the word “rental” but are completely unrelated:

• GST/HST — a value-added sales tax on the supply of goods and services. On a rental, the question is whether the rent itself is a taxable supply the landlord must charge tax on. Administered under the Excise Tax Act.
• Income tax — tax on the net profitfrom the rental (rent minus expenses). For non-residents this includes Part XIII withholding (a flat 25% of gross rent, reported on an NR4, recoverable via a Section 216 return).

These are administered separately, calculated separately, and have nothing to do with each other. A long-term residential landlord charges noGST/HST on the rent (it is exempt) but may still owe income tax on the profit. A non-resident landlord's rent is GST/HST-exempt regardless of their residency, while Part XIII income-tax withholding applies precisely because they are a non-resident. Two different questions, two different answers. We come back to this because it is the single most common confusion for cross-border owners — see the dedicated section below.

The rates, when GST/HST does apply, are:

• 5% GST — Alberta, British Columbia, Saskatchewan, Manitoba, and the territories (and the federal GST portion everywhere).
• 13% HST — Ontario.
• 14% HST — Nova Scotia (reduced from 15% on April 1, 2025).
• 15% HST— New Brunswick, Newfoundland & Labrador, and Prince Edward Island.
• Quebec — 5% GST plus a separate 9.975% Quebec Sales Tax (QST), administered by Revenu Québec.

Long-term residential rent — a lease of one month or more, for residential use — is an exempt supply under the GST/HST rules. That means:

• You do not charge GST/HST on the rent. There is no HST on an apartment lease, a house rental, or a long-term basement suite. If a landlord ever adds HST to residential rent, that is an error.
• You cannot claim input tax credits (ITCs). Because the rent is exempt, the GST/HST you pay on related expenses — repairs, property management fees, supplies, contractor invoices — is not recoverable. It becomes part of your cost (and is deductible for income-tax purposes as part of the expense, but not refundable as a sales-tax credit).
• You do not register for GST/HST for this rent. Exempt supplies don't count toward the small supplier threshold and don't create a registration obligation.

The critical distinction: exempt is not the same as zero-rated. This is the answer to “is residential rent zero-rated or exempt?” — it is exempt. The two sound similar because in both cases the customer pays 0% tax, but the consequence for the landlord is opposite:

• Exempt — no tax charged to the tenant, and the supplier cannot claim ITCs on inputs. This is long-term residential rent.
• Zero-rated (0%) — no tax charged to the customer, but the supplier can claim ITCs on inputs. Zero-rating is reserved for things like basic groceries, prescription drugs, and exports. It does not apply to residential rent.

So the practical takeaway for a residential landlord: you charge your tenant nothing in GST/HST, but you also eat the GST/HST on your own bills — there is no credit to claw it back. Anyone who tells you residential rent is “zero-rated” and that you can therefore recover ITCs is wrong, and acting on that advice invites a CRA reassessment.

The exemption is specifically for long-term residential rent. When a residential unit is supplied for continuous periods of less than one month (under 30 days) — the Airbnb / VRBO / hotel-style model — it is a taxable supply. GST/HST applies to those bookings unless the supplier qualifies as a small supplier (below).

In short, the length of stay flips the treatment:

• One month or more, residential use — exempt, no GST/HST.
• Under one month (short-term accommodation) — taxable, GST/HST applies (subject to the small supplier threshold).

If the same property is used for both long-term and short-term rental at different points in the year, the treatment follows the actual use for each period — this gets fact-specific and warrants professional advice.

Short-term rental also carries its own layer of considerations — platform tax collection, provincial/municipal registration, and (for cross-border snowbirds) US-side sales and tourist taxes. We keep the summary here and cover the short-term deep dive in our Airbnb & VRBO tax guide for Canadians.

A supplier is a small supplier — and therefore not required to register for or charge GST/HST — while total taxable supplies stay at or below $30,000 over four consecutive calendar quarters (or in a single calendar quarter).

Two points that matter for landlords:

• Exempt long-term residential rent does NOT count toward the $30,000. The threshold measures taxablesupplies only. A landlord earning $40,000/year in long-term residential rent is not near the threshold — that rent is exempt and simply doesn't enter the calculation.
• Short-term and commercial rent DO count. If your taxable short-term accommodation and/or commercial rent crosses $30,000 in the rolling window, you must register for GST/HST and begin charging it.

Below the threshold, registration is optional. A small supplier may choose to register voluntarily — which is sometimes worthwhile because it unlocks ITCs on the inputs to the taxable supply (e.g. GST/HST on cleaning, supplies, and management for a short-term rental). Above the threshold, registration is mandatory.

Rent on commercial real property — office, retail, industrial, warehouse, and similar non-residential space — is a taxable supply. The landlord charges GST/HST on the rent at the rate applicable to the province where the property is located:

• 5% GST — AB, BC, SK, MB, and territories.
• 13% HST — Ontario.
• 14% HST — Nova Scotia.
• 15% HST — NB, NL, PE.
• Quebec — 5% GST + 9.975% QST.

Because commercial rent is taxable, the flip side is favorable to the landlord: a GST/HST-registered commercial landlord can claim input tax credits on the GST/HST paid on expenses connected to that commercial property. That is the structural mirror of the residential exemption — residential landlords charge no tax but get no ITCs; commercial landlords charge tax and do get ITCs.

Mixed-use buildings (retail on the ground floor, apartments above) require the landlord to split the property between the taxable commercial portion and the exempt residential portion, charging GST/HST only on the commercial rent and apportioning ITCs accordingly. This apportionment is a common audit area — keep clean records of the split.

This is the section that matters most for BorderBird's core audience — non-resident and cross-border landlords — because it resolves a confusion that costs people real anxiety (and sometimes real money):

GST/HST and Part XIII income-tax withholding are two entirely separate obligations. One is a sales tax; the other is an income tax. Your residency changes one and not the other.

• Your long-term residential rent is GST/HST-exempt — regardless of where you live. A landlord in the US, UK, or anywhere else renting out a Canadian apartment on a standard lease charges no GST/HST, the same as a landlord in Toronto. Residency is irrelevant to the sales-tax exemption; it turns on the nature of the supply (long-term residential), not the supplier.
• Part XIII withholding applies because you are a non-resident. A flat 25% of gross rent is withheld and remitted to CRA, reported on an NR4 slip. You can reduce it to 25% of net rent by filing an NR6 before the year begins, and recover any over-withholding by filing a Section 216 return after year-end. This is income tax, and it has no GST/HST component whatsoever.

The practical upshot: a non-resident landlord with a normal long-term Canadian rental has a Part XIII / NR4 / Section 216 obligation and noGST/HST obligation on the rent. The two never touch. Don't let a property manager or accountant conflate them — the 25% you see withheld on your NR4 is income tax, not a sales tax, and there is no separate GST/HST being charged on your exempt residential rent.

The residential exemption applies to renting out a home — but acquiring or buildinga new one is a taxable event. This is the source of two related rules landlords ask about, including “GST self-assessment on rental property.”

New Residential Rental Property (NRRP) Rebate. A landlord who buys or builds a new residential rental property pays GST/HST on that purchase (new housing is taxable, unlike used housing). Because the property will be used to make exempt long-term residential rentals, the landlord generally cannot claim full ITCs — but may instead claim a rebate of part of the GST/HST paid, the NRRP rebate. The standard NRRP rebate returns up to 36% of the federal GST portion and phases out for units with a fair market value between $350,000 and $450,000 (fully phased out at $450,000), with a separate provincial component in some HST provinces. It is claimed on Form GST524 (with Form GST525 for multi-unit/co-op claims), generally within two years of the relevant date.

Enhanced rebate for purpose-built rental. For larger purpose-built rental housing — a multi-unit residential complex with at least four self-contained units (each with a private kitchen, bath, and living area) or ten or more residential units — a much more generous Purpose-Built Rental Housing (PBRH) rebate applies: 100% of the federal GST (or federal portion of HST), with no phase-out. Construction must begin after September 13, 2023 and before 2031, and be substantially completed before 2036. (This enhanced rebate received royal assent on March 26, 2026.) A single new condo or house rented out falls under the standard partial NRRP rebate above — not the PBRH 100% rebate.

Self-supply / self-assessment (builders). A builder who constructs (or substantially renovates) residential rental housing and then rents it out is subject to the self-supply rules: they are treated as having sold the property to themselves and re-acquired it at fair market value at the point of first occupancy, and must self-assess GST/HST on that fair market value. This is the “GST self-assessment on rental property” scenario: the builder remits GST/HST calculated on the FMV of the completed unit, and can then typically claim the NRRP rebate to recover part of it.

These rules are mechanically involved and property-specific — the NRRP rebate amount, the FMV self-assessment, and the interaction with ITCs on construction inputs all need care. If you are buying a new-build to rent or building rental housing, get GST/HST-specific advice before closing; the rebate is often left unclaimed because landlords don't know it exists.

The whole framework, compressed:

• Long-term residential rent (lease ≥ 1 month) — EXEMPT. No GST/HST charged; no ITCs claimable; no registration. Residency of the landlord is irrelevant.
• Short-term accommodation (continuous stay < 1 month) — TAXABLE,unless you're a small supplier (≤ $30,000 taxable supplies over 4 quarters). ITCs available if registered.
• Commercial rent (office/retail/industrial) — TAXABLE at 5%–15% depending on the province. ITCs available.
• Buying/building NEW residential rental — GST/HST payable on the purchase/build; claim the NRRP rebate; builders self-assess on FMV at first occupancy.
• Non-resident income-tax withholding (Part XIII) — a separate tax. 25% of gross rent, NR4, reducible via NR6, reconciled via Section 216. Not GST/HST.

References and calculators for Canadian and non-resident landlords:

• CRA Part XIII Remittance Calculator — the income-tax withholding on non-resident rent (separate from GST/HST)
• Section 216 calculator — compare 25%-on-gross withholding against tax on net rent
• Cross-border landlord tax glossary — NR4, NR6, Part XIII, Section 216, and more, defined

BorderBird tracks Canadian rental income, expenses, and — for non-resident owners — Part XIII withholding and Section 216 supporting data in one ledger. It keeps the sales-tax and income-tax sides of your rental cleanly separated, so your accountant gets clean exports for each. Try it free — one property, no time limit, no credit card.

Related reading:

• NR4 Form: Complete Guide for Non-Resident Landlords
• Airbnb & VRBO Tax for Canadians (short-term rental deep dive)
• Section 216 Election: Complete Guide
• T776 Rental Income Form: Complete Guide