GST Relief on Homes Up to $1.5M
Owning a home is a milestone for many Canadians, but rising costs have made it increasingly challenging – now, a new federal GST rebate aims to ease that burden for first time buyers.
For many young Canadians, purchasing a home is a significant financial challenge. To help ease this burden and encourage the construction of new residential properties, the federal government has introduced a new GST rebate for first-time home buyers (FTHBs). On May 27, 2025, the Minister of Finance and National Revenue tabled legislative proposals to amend the Excise Tax Act (ETA) to implement this initiative.
Through the FTHBs GST Rebate, eligible buyers can recover up to 100 per cent of the GST (or federal portion of HST) paid on new homes valued up to $1 million. Homes priced between $1 million and $1.5 million will qualify for a partial rebate, helping reduce costs for those entering the market. With potential savings of up to $50,000, this initiative is expected to provide $3.9 billion in tax relief over five years, starting in 2025-26.
What Properties Qualify for the FTHB GST Rebate?
The FTHB GST Rebate applies to newly constructed or substantially renovated homes in three main catagories:
- Newly built homes purchased from a builder, including those situated on leased land.
- Owner-built homes, where the individual builds or contracts someone to build the home on land they own or lease.
- Shares in a cooperative housing corporation, where the co-op has paid GST or the federak part of the HST on the new housing unit.
To qualify:
- The home buyer must serve as the FTHB’s primary residence.
- The buyer must also be the first occupant of the property.
The rebate only applies to purchase agreements signed between May 27, 2025, and 2031. Additionally, construction must begin before 2031 and be substantially completed by 2036.
For questions or concerns, please reach out to Chris Bodnar.