Your co-op probably knows that by qualifying as a non-profit organization providing housing, you can receive GST/HST rebates, but did you know that applying and qualifying for municipal status could open up opportunities for more refunds?
Municipal status was initially created to recognize the work of municipalities in developed rent-geared-to-income (RGI) housing with the help of CMHC. This status was later extended to other housing providers that offer RGI housing, such as co-ops.
The rebate rates for housing providers with municipal status are
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100 per cent of the GST (the federal part of the HST paid or payable)
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78 per cent of the provincial part of the HST for designated municipalities based in Ontario.
To qualify for municipal status, your co-op must meet four criteria:
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The organization is a co-operative housing corporation, a charity, a non-profit organization or a public institution.
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The organization supplies long-term residential accommodation within a program that provides housing for low- to moderate-income households.
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More than 10 per cent of the housing units in your co-operative receive RGI assistance.
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The organization receives funding from a government or municipality to assist it in supplying accommodation through a program for housing low- to moderate-income households.
Examples of the funding programs mentioned in point four include those that the Agency administers on behalf of CMHC, like the Rent Supplement Program and the Rental Assistance Program.
Some co-ops mistakenly believe that if they don’t qualify for non-profit status, they don’t qualify for municipal status either. However, that is not the case. Municipal status, and GST / HST rebates, are available to both housing co-operatives and non-profits, so we encourage you to apply for municipal status if you haven’t already. Additionally, it is possible that your co-op could qualify for both non-profit and municipal status.
For more information on securing municipal status for your co-op, speak to your auditor or reach out to CHF Canada for more information and resources.