Province announces supports for landlords
The Government of PEI is creating three new programs to support landlords during the 2023 rental freeze.
The Province is launching a Rental Unit Property Tax Subsidy to provide relief of provincial property taxes payable in 2023 which would decrease landlord property tax costs. This will allow property owners of rental units to redirect funds toward other cost increases.
Owners of rental units in in agreements longer than six months as of December 31, 2022, may be eligible for financial property tax benefits. There are three categories of eligibility, which include:
- Owners of long-term units where heat is included in the rent and oil is the primary source of heat will receive a subsidy of $0.75 per $100 of tax assessed value;
- Owners of long-term units where heat is included and a source other than oil is considered the primary heat (ie. electric) will receive $0.375 per $100 of tax assessed value; and
- Owners of long-term rentals where heat is not included in the rent will receive a subsidy of $0.375 per $100 of tax assessed value.
Eligible applicants who heat with oil as the primary source will have their property tax subsidy capped at 3 per cent of annual rental income, and those with other primary heat sources will have their subsidy capped at 2 per cent.
The Province, through the Department of Environment, Energy and Climate Action, has also expanded the Multi-Unit Residential Building Rebate Program in an effort to increase the value of heat pump and insulation rebates, add a rebate on electric hot water heaters, remove limits for duplexes and create greater access to heat pumps for apartment building owners. This program will:
- Increase rebate amounts for mini split air source heat pumps (ASHPs) from $1,200 to $2,000;
- Increase the rebate on insulation from the current $25 per square foot for rebate value (SQ/R-value) to $65/SQ/R-value;
- Introduce a rebate of up to $2500 on electric hot water heaters;
- Remove lifetime limits on rebate amounts per building, remove yearly limits for air source heat pumps and window rebates;
- Increase yearly rebate limits per building from existing $2,500 per unit for row houses and $1,500 per unit for apartments to $10,000 per unit for both;
- Remove limits from rental duplexes and treat those buildings as a regular single-detached homes.
Through Finance PEI the Rental Property Heating Program will see a $10 million dollar investment from government allowing property owners to borrow funds for costs associated with the purchase and installation of equipment that is eligible for the Energy Efficiency Equipment Rebates at efficiencyPEI, including ENERGY STAR® certified heating.
Finance PEI will provide financing per rental property for these upgrades over a 10-year period, with the Department of Environment, Energy and Climate Action reimbursing Finance PEI for the interest portion of the loans on behalf of homeowners. This will result in zero per cent interest to the borrower.
Applications for all programs will open on January 13, 2023. Property owners must submit applications to each program separately, and each property separately, if applying for supports for more than one rental property.
“Property taxes, financing, increased cost of insurance and heating rental units are all challenges for property owners to provide rental housing in PEI. We know that more rental units are needed to support PEI’s growing economy and a challenging housing market. This suite of programs will help to support property owners to maintain rental units while current programs will incentivize current and future building to continue increase the overall supply of social, affordable and market housing.”
– Honourable Matthew MacKay, Minister of Social Development and Housing
“This year has been an unpredictable and difficult year for all Islanders as we adapt to deal with transitional pandemic supply chain issues coupled with record inflation due to global events out of our control. We have worked hard to shield renters from volatile price increases as much as possible, however, we know that our landlords are also vulnerable to the increases in inflation and now more than ever they need support to ensure that they can continue to provide their invaluable service to our local communities and economy. The property tax subsidies announced today will partially offset the increases in costs that owners of residential rental units have had to incur, and I encourage all eligible unit owners to apply for the supports available”.
– Honourable Mark McLane, Minister of Finance
“To help meet the province’s Net Zero goals, government is making it easier for rental property owners to invest in the energy efficiency of their rental units. From heat pumps to insulation to electric hot water heaters, these investments are good for the environment, are cheaper than alternatives and can help make tenants more comfortable.”
– Honourable Steven Myers, Minister Environment, Energy and Climate Action Steven Myers
“The cost of heating our homes continues to climb. As we head into the winter months, now is the time to switch to a more efficient heating system, that keeps tenants warm, saves money and helps us reach our net zero goals. We know the cost of these systems can be expensive up front, so Government wants to help make that transition easier with the Rental Property Heating Program.”
– Honourable Bloyce Thompson, Minister of Economic Growth, Tourism and Culture
Senior Communications Officer
Social Development and Housing