Tax Tip Thursday

There has been a rent subsidy available since March but until September 27 it was only available through your landlord. If they did not choose to apply for it, as a tenant you were SOL. But, as of September 27, there is a new rent subsidy and it is available directly to the tenants! It mirrors the wage subsidy, which has been working very well.

So, if you are paying rent, or even a mortgage for your business space, you could be eligible. There is an eligibility process, but again, it is the same as the wage subsidy. So even if your revenues are only down a little, you could still qualify! So make sure you go through the calculations!

Properties that Qualify:

• Any “real or immovable property”
  • In other words, any buildings or land
• Your organization must own it or rent it, and
• Must use it in the course of its ordinary activities.

Properties that do NOT Qualify:

• Your home, cottage, or other residence used by you, your family members, or other non-arm’s-length persons,
• Any properties you own that are primarily used to earn rental income from arm’s-length parties, or
• Any properties that are primarily used to earn rental income directly or indirectly from a non-arm’s-length party

There are a few criteria that expenses need to meet in order to be eligible for inclusion in your claim for a particular period:

• Only amounts paid or payable to an arm’s-length party can be included,
• The expense must be in respect of the claim period, and
• The expense must be paid or payable under a written agreement in place before October 9, 2020
  • A renewal on substantially similar terms or assignment of such an agreement is also acceptable.

Important Note: If you have not paid the amounts due for your eligible expenses yet, you must attest (confirm) that these amounts will be paid within 60 days of receiving your rent subsidy payment.

You cannot claim expense that were paid or payable:

• To non-arm’s-length entities, or
• For a timeframe that falls outside of the claim period you are applying for.

Important Note: Your eligible expenses are different for qualifying properties you rent than they are for qualifying properties that you own.

For rented property, it is pretty much just the rent unless you have a net rental agreement that includes insurance or property taxes.

For mortgaged property, you can also claim:

• Property taxes,
• Property insurance, and
• Interest on a commercial mortgage

This is a grant from our Ontario Government! Yeaaaaaaaaa!!

And it’s a grant!  Not a loan!

It is between $10,000 and $20,000, depending on your revenue decline due to COVID-19:

• Each eligible small business will be able to use the support however they want WITHIN their business
• Applicants must demonstrate they experienced a revenue decline of at least 20% when comparing monthly revenue in April 2019 and April 2020
  • This time period was selected because it reflects the impact of the public health measures in Spring 2020, and as such provides a representation of the possible impact of these latest measures on businesses. Note: the application portal will provide alternative revenue decline comparator months for small businesses not in operation in April 2019 or April 2020

To receive this grant, a business must:

• Be required to close or significantly restrict services due to the province-wide shutdown effective on December 26, 2020 at 12:01 AM,
  • Please refer to the “Eligible Businesses” section
• Have experienced revenue decline of at least 20%, and
  • Please refer to the “Calculating Revenue Loss” section
• Had 99 or fewer employees at the enterprise level
  • Please refer to the “Enterprises” section for a definition and further details

If you qualify, the grants start at $10,000. The grant will provide businesses with dollar-for-dollar funding to a maximum of $20,000 to help cover expected decreased revenue as a result of the province-wide shutdown.

It doesn’t cover everyone, but it is going to make a difference to a lot of businesses!

We are offering support to businesses that want to apply for this and any other grants. Please contact us to learn more!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.