Developing a new building or making a change in your current operations may affect your existing GST status. Consult your accountant or the Canada Revenue Agency about the impact on your status before embarking on any building projects or changes.

Let’s say you currently have municipality status for all of your rent-geared-to-income (RGI) units, and are converting some units to non-RGI units. Municipality status does not apply to these converted non-RGI units, so you would no longer be able to claim a municipal rebate on these non-RGI units.

Charitable status would not be an issue, as long as the purpose of a new building falls within the types of activities included in the purpose of the charity.

In addition, most charities must allocate donated funds in the year the donations are received. If donated funds are being used to finance a project and are a significant portion of the total annual funds you receive, you may have to obtain special permission from the Canada Revenue Agency to allow you to accumulate sufficient funds beyond that year to complete the project.

Funding sources for a new project must also be reviewed to ensure you continue to meet the 40% government funding test in order to claim a rebate as a qualifying non-profit organization. Chapter two of the GST Guide has more information on the 40% funding test.

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