Manitoba’s Rental Housing Construction Tax Credit officially launches

Manitoba has now officially launched the Rental Housing Construction Tax Credit (RHCTC), a new refundable tax credit designed to stimulate the construction of new multi-unit residential rental housing across the province. With the accompanying Rental Housing Construction Incentive Regulation, Man. Reg. 65/2025, now approved and in force, developers and owners finally have a complete framework for accessing the credit.

The RHCTC aims to increase the supply of rental housing by providing a refundable tax credit of up to $8,500 per eligible unit, available upon project completion, for qualifying new residential rental construction undertaken in Manitoba.

Regulations now in force

The Rental Housing Construction Incentive Regulation is now published and sets out the detailed rules governing the credit, including:

• Eligibility requirements for projects and units
• Application procedures
• Conditions for maintaining rental use
• Timing of credit issuance
• Compliance and reporting obligations

Qualifying entities

For the purposes of the tax credit program, a “qualifying entity” may be either a for-profit individual or trust or a non-profit corporation that is permanently established in Manitoba (including municipal or First Nation–owned corporations or their subsidiaries). Notably, a partnership or joint venture is also a qualifying entity when it owns an eligible rental housing project and is the entity carrying out the construction and holding the interest in the rental housing development that meets the program’s criteria.

Partnerships and joint ventures

The Regulations now contain specific rules for projects structured through partnerships or joint ventures commonly seen in multi-unit residential construction and have set out how these unincorporated project structures can participate in the RHCTC program. These provisions make clear that, where a project is carried out through a partnership or a joint venture, the project-level entity (the partnership or joint venture) is the qualifying entity for entitlement and the rules below determine how tax credit certificates are designated, allocated and claimed by members or participants.

Entitlement begins at the project entity level

Whether a project is structured as a partnership or a joint venture, the entity carrying out the construction is treated as the qualifying owner for purposes of the RHCTC. That means the partnership or joint venture itself and not the individual partners or participants first becomes entitled to the credit.

This reflects how most development projects operate in practice: The project vehicle holds the land, obtains the building permit and completes construction.

Designated member interacts with the Province

Partnerships and joint ventures must identify a designated member to serve as the main point of contact with the Minister. This designated member typically submits the application, provides required information and receives the tax credit certificate on behalf of the group. This avoids each partner or participant having to interact with the program separately.

Credits are allocated to partners or joint venture participants

Once the project-level credit has been issued, it is allocated among the partners or co-venturers. For partnerships, this is usually based on the profit-sharing ratios in the partnership agreement. For joint ventures, the allocation will follow the joint venture agreement’s cost-sharing or revenue-sharing formulas. Project participants should review their agreements to ensure the allocation method aligns with how the Regulation expects credits to be distributed.

Each partner or participant claims their own share

After receiving their share of the credit, each eligible partner or co-venturer claims it individually on their own tax return. The partnership or joint venture does not claim the credit on a return of its own. This makes it important for each participant to confirm they are an eligible taxpayer and to retain documentation from the designated member.

Ongoing Compliance Obligations

The partnership or joint venture that receives the credit is responsible for meeting all ongoing program requirements including maintaining the units as rental housing for the required minimum period and keeping appropriate records.

If the project fails to meet these obligations, some or all of the credit may need to be repaid, and that repayment ultimately affects the partners or co-venturers who received the credit. Project agreements should therefore include clear provisions addressing:

• Compliance responsibilities
• Reporting obligations
• Documentation requirements
• Indemnities or other protections in case of recapture

These rules also apply in tiered structures where multiple partnerships or joint ventures sit above the project entity, ensuring the credit can flow through each level appropriately.

Key program update: Extended application timeline

Because the program only launched November 6, 2025, the RHCTC administration team (Manitoba Housing and Renewal Corporation, Department of Housing, Addictions and Homelessness) has confirmed an important timing extension: Applications may now be submitted within 90 days of receiving a building permit or within 90 days of the program launch.

This means developers can now apply for any eligible residential rental construction project (four or more units) with a building permit issued on or after January 1, 2024.

This extension gives developers who proceeded with projects in 2024 in anticipation of the credit an opportunity to access the program retroactively.

Eligibility overview

While the program details remain generally consistent with the initial announcement, the key eligibility points include:

• New construction of residential rental properties with four or more units
• Building permits issued on or after January 1, 2024
• Units must be long-term residential rental units
• Credit available upon substantial completion
• Compliance certification required for the minimum rental period

Additional requirements apply depending on project ownership, partnership arrangements and whether any units are intended to meet affordability criteria.

Next steps for developers and owners

With the program now active and the application window extended, developers should:

1. Review eligibility for projects permitted on or after January 1, 2024
2. Prepare RHCTC applications within the 90-day window now available
3. Assess project structures – especially partnerships – in light of the new regulatory provisions
4. Track substantial completion timelines to ensure the credit can be claimed when available

To help navigate or learn more about this tax credit and discuss whether it may be available to you or your organization, please contact the advisors in MLT Aikins taxation and real estate groups – we’d be happy to assist you.

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