In a major move to make housing more affordable and boost new home construction across Canada, the Government of Canada has introduced a new Goods and Services Tax (GST) rebate for first-time home buyers. If you’re a first-time buyer planning to purchase a new home, this could mean savings of up to $50,000.
Here’s everything you need to know about the First-Time Home Buyers’ GST Rebate (FTHB GST Rebate) and how it could benefit you.
What’s Changing?
On May 27, 2025, the Honourable François-Philippe Champagne, Minister of Finance and National Revenue, tabled legislative proposals to amend the Excise Tax Act. These changes create a new GST rebate for eligible first-time buyers:
- 100% GST rebate on new homes valued up to $1 million
- Partial rebate on homes priced between $1 million and $1.5 million
- No rebate on homes $1.5 million or more
This new initiative is expected to provide $3.9 billion in tax relief over five years, beginning in 2025-26.
Who Qualifies?
To be eligible for the FTHB GST Rebate, you must:
- Be at least 18 years old
- Be a Canadian citizen or permanent resident
- Not have owned or lived in a home (yours or a partner’s) in Canada or abroad during the current calendar year or the previous four years
- You’ll also need to be the first occupant of the home and intend to live there as your primary residence.
Types of Homes That Qualify
You can qualify for the rebate if you’re:
- Buying a New Home from a Builder
Must sign the agreement of purchase and sale between May 27, 2025, and 2031
Construction must begin before 2031 and be substantially completed by 2036
Rebate of up to $50,000
- Building a Home on Your Own Land
Rebate applies to the GST paid to build or contract a builder
Same timelines as above apply
- Buying a Share in a Co-operative Housing Corporation
Share must give you the right to live in a new co-op housing unit
Co-op must have paid GST or the federal portion of HST
Same deadlines and eligibility rules apply
How the Rebate Works
- For homes under $1 million: Full GST rebate (up to $50,000)
- For homes between $1 million and $1.5 million: Partial rebate
- E.g., A $1.25 million home gets a 50% rebate (~$25,000)
- Homes $1.5 million or more: No rebate
Important Limitations
One-time use only: You can’t claim the rebate more than once.
If your spouse or common-law partner has claimed the rebate before, you cannot claim it.
Agreements signed before May 27, 2025 are not eligible—even if later modified or reassigned.
Why This Matters
With the average cost of new homes in many urban centres approaching or exceeding $1 million, this rebate can provide a substantial financial cushion for young Canadians entering the housing market. Combined with other federal housing initiatives, this policy aims to help first-time buyers while also encouraging builders to develop more homes across the country.
Final Thoughts
This is a significant win for first-time buyers and the construction industry alike. If you’re planning to buy, build, or invest in co-op housing as your first home, now is the time to start planning. For more details, consult a tax professional or visit Canada.ca when the legislation is finalized.
