Resort Property Investment Tax Credit

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.

For more information about corporate income taxes in Newfoundland and Labrador, please contact the Tax Policy Division.

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