GST Rebate for First-Time Buyers

As of May 27, 2025, a new GST rebate has been tabled by the federal government to help make newly built homes more accessible to Canadians entering the housing market. While full details are still being finalized, the main information released so far includes:

If you are a first-time home buyer, you may be eligible for a FTHB GST Rebate if:

you buy a new home from a builder;
you build, or hire someone else to build, a home on land you own or lease; or
you buy shares of a co-operative housing corporation.

To be considered a “first-time home buyer” for the purposes of the FTHB GST Rebate, an individual would generally need to meet the following conditions:

be at least 18 years of age;
be either a Canadian citizen or a permanent resident of Canada; and
not have lived in a home, whether in or outside Canada, that they owned or that their spouse or common-law partner owned in the calendar year or in the four preceding calendar years.

First-time Buyers purchasing newly built homes would receive:

A full rebate of the 5% GST on new homes prices up to $1 million,
A partial rebate on homes between $1 million and $1.5 million,
No rebate would be available for new homes valued at or above $1.5 million.

New Homes Purchased from a Builder / Owner-Built Homes / Shares of a Cooperative Housing Corporation
The FTHB GST Rebate would allow an individual to recover up to $50,000 of the GST (or the federal part of the HST) paid in respect of a new home purchased from a builder / owner built (including on leased land).

To qualify for a FTHB GST Rebate, at least one of the owner-builders would need to be a “first-time home buyer” that is building, or hiring another person to build, the new home for use as their primary place of residence. That individual would also need to be the first individual to occupy the home as a place of residence.

The FTHB GST Rebate would generally be available if:

the agreement of purchase and sale for the home is entered into with the builder on or after May 27, 2025 and before 2031; and
construction of the home begins before 2031 and the home is substantially completed before 2036.

* A FTHB GST Rebate would not be available in respect of a co-op share if the co-op housing is eligible for the 100% GST rebate for purpose-built rental housing.

Limitations
To ensure that the rebate is available as intended to first-time home buyers after the announcement date, a series of rules would limit the availability of the FTHB GST Rebate in certain circumstances. These rules include the following:

An individual would not be permitted to claim a FTHB GST Rebate more than once in their lifetime.
An individual would not be permitted to claim a FTHB GST Rebate if their spouse or common-law partner previously claimed a FTHB GST Rebate.
If an agreement of purchase and sale for a new home was originally entered into before May 27, 2025 and the agreement is subsequently cancelled and a new agreement of purchase and sale is entered into (or the agreement is varied or altered to effect that outcome), the FTHB GST Rebate may be disallowed in respect of the sale of a new home under the new agreement (and would not be allowed in respect of the varied or altered agreement).

This is great news for both the housing market and young Canadians trying to get their foot in the door. It applies whether they’re buying a home from a builder, building one themself, or purchasing in a co-op.

If you or someone you know is thinking about buying their first home, reach out today to find out how this rebate could help.

Candace Perko,
Mortgage Broker