COVID-19 FAQ: Commercial Rents and GST Remittances

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Question:

“I’ve given some of my commercial tenants a deferral on rent for the next three months. I don’t need to remit GST on the rent until I receive it, right?”

Answer:

Wrong. Landlords who agree to defer rent can find themselves having to remit GST immediately on rent that is not going to be paid until some months down the road. This is because GST on rent is due when the rent is “payable”, not when it is paid.

The problem can be solved with careful drafting of the deferral agreement, to make clear that the postponement is of the rent liability itself, and not just the payment of the rent.

CRA’s own COVID-19 deferral relief for GST, which puts off remittances until June 30, helps in the short term but is not a permanent fix.

If you are a commercial landlord dealing with rent deferrals to help commercial tenants, contact us for help to ensure you remain compliant with your GST obligations without taking on immediate remittance requirements.

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