GST Rebate for First Time Buyers

CANADIANS ESTIMATED TO SAVE $3.9 BILLION IN TAX OVER 5 YEARS

On May 27, 2025, the federal government introduced a new housing initiative to support affordability for first-time home buyers in Canada. This policy provides a full or partial GST rebate on newly built homes valued up to $1.5 million, potentially saving buyers up to $50,000.


This measure aims to reduce upfront costs for first-time buyers and encourage the construction and purchase of new housing.



PROGRAM OVERVIEW


Eligible buyers may qualify for:


  • A 100% rebate on newly constructed homes priced up to $1 million.
  • A phased rebate on homes priced between $1 million and $1.5 million.

Example: A home valued at $1.25 million would qualify for a 50% GST rebate

  • No rebate for homes priced above $1.5 million.



Note: This applies only to the federal portion of GST/HST.



WHO'S ELIGIBLE?


To qualify, buyers must:


  • Be at least 18 years old
  • Be a Canadian citizen or permanent resident
  • Not have owned or lived in a home owned by themselves or their spouse/common-law partner in the current or previous four calendar years
  • Intend to use the home as their primary residence



This rebate can only be claimed once per individual. If your spouse or common-law partner has claimed it before, both of you become ineligible.



WHAT PROPERTIES QUALIFY?


The rebate applies in the following scenarios:


  • Purchasing a newly built home from a builder
  • Constructing a new home on owned or leased land ("owner-built")
  • Buying shares in a co-operative housing project



To be eligible, the agreement of purchase and sale—or the construction start date—must be on or after May 27, 2025. Construction must begin before 2031 and be substantially completed before 2036.


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For many first-time buyers, this rebate could significantly reduce closing costs and improve affordability. While it does not apply to resale homes or properties above $1.5 million, it provides a compelling incentive to consider new construction.


This program may also contribute to increased demand for newly built homes, supporting housing supply in the years ahead.



For more details, read the full federal announcement HERE. We'll continue to share new information as it becomes available.



If you have questions about how this GST rebate fits into your financing options or purchase plans, we’re happy to help you navigate the details!

 



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