What First-Time Home Buyers Need to Know About the Pending GST Rebate in Canada

A major update is on the horizon for first-time home buyers across Canada—and it could mean thousands of dollars in savings on new construction homes. While this change is not yet law, the federal government has introduced a proposal that would significantly expand GST rebates for eligible buyers.

Here’s a clear breakdown of what’s being proposed and what it could mean for you.

What’s Being Proposed?

The government is considering a new GST rebate structure aimed at helping first-time buyers enter the housing market—especially those looking at new-build homes.

Key Highlights:

Full GST rebate for new homes under $1,000,000
If approved, qualified first-time buyers could receive a full GST rebate on new homes priced under $1M. This is a major boost, as new construction purchases currently require paying the full 5% GST upfront.

Partial rebate for homes priced $1M–$1.5M
Buyers purchasing within this price range may still qualify for a partial rebate. This is significant, as properties in many urban areas often exceed the current rebate thresholds.

Applies only to purchase agreements dated May 27, 2025 or later
The effective date is crucial. Only agreements signed on or after May 27, 2025 would qualify if the proposal becomes law.

Must meet first-time buyer qualifications
Buyers must meet the federal definition of a first-time home buyer—typically meaning they have not owned a home in the previous four years, among other criteria.

Important: This Rebate Is Not Yet Approved

This GST rebate structure is still in proposal stage and has NOT been passed into legislation. That means:

The details may change
Eligibility criteria may be updated
The program may be revised or delayed

Buyers considering new construction should stay informed and consult a real estate professional or legal expert to understand how these changes might affect their timing and purchasing decisions.

Why This Matters for First-Time Home Buyers

With high construction costs and rising home prices, many first-time buyers have found new-build homes financially out of reach. A full or partial GST rebate could:

Save buyers tens of thousands of dollars
Make new construction more accessible
Help more Canadians enter the housing market
Encourage development in high-demand markets

For example, on a $900,000 new home, a full GST rebate could return up to $45,000—a huge financial relief during the homebuying process.

Planning to Buy a New Construction Home?

If you’re thinking about purchasing a new home in the coming months or year, this proposed rebate could be a game-changer. However, navigating the timing—especially around proposed and pending legislation—can be tricky.

Before making a major decision, it’s wise to: