On June 1, 2007 the provincial government announced a creative new tax credit to encourage high-end tourist resort developments in rural areas of the province. Details of the program are prescribed in the Resort Property Investment Tax Credit Regulations.
This new program provides a provincial income tax credit of 45% of the purchase price of Qualifying Resort Development Property Units of a Qualifying Resort Development Complex outside the North East Avalon. This includes a newly-constructed tourism complex, or a newly-constructed expansion or a property where at least 90 per cent of the building area is rebuilt, containing a minimum of 50 units, and must include a variety of amenities and leisure facilities. The Qualifying Resort Development Property Unit must be a minimum of 35 square metres (376 square feet).
The maximum amount of capital to be raised under the tax credit program for a Qualifying Resort Development Complex is $50 million. The Qualifying Resort Developer must apply for certification before January 1, 2013 and must commit to a minimum of five years of continuous operation.
The Qualifying Resort Developer has 12 months after being registered to commence construction of a Qualifying Resort Development Complex and 24 months after commencement of construction to achieve Canada Select 4 status, complete construction and begin offering units for sale.
The Qualifying Investor must enter into a 20-year contract relating to the availability of the unit for the rental pool. The investor must not sell or transfer ownership of the property unit for a minimum of five years after the original sale of the unit.
The maximum lifetime tax credit is $150,000 per investor. The credit will be available for units purchased from a Qualifying Resort Developers no more than five years after the units are first made available for sale.
- News Release – Resort Property Investment Tax Credit to Attract New Business
- Income Tax Act, 2000, section 46.1
- Resort Property Investment Tax Credit Regulations
- Frequently Asked Questions
- Application (28 KB)
For more information about corporate income taxes in Newfoundland and Labrador, please contact the Tax Policy Division.
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