From the Department of Finance Canada
Backgrounder
To lower the upfront cost of buying a new home for young Canadians and spur the construction of new homes across the country, the government is eliminating the Goods and Services Tax (GST) for first-time home buyers on new homes up to $1 million and reducing the GST for first-time home buyers on new homes between $1 million and $1.5 million.
On May 27, 2025, the Minister of Finance and National Revenue, the Honourable Francois-Philippe Champagne, tabled legislative proposals to amend the Excise Tax Act to introduce a new GST rebate for first-time home buyers (the “FTHB GST Rebate”). As a result of this rebate, first-time home buyers will be able to save up to $50,000 on a new home. This measure is expected to deliver $3.9 billion in tax savings to Canadians over five years, starting in 2025-26.
First-Time Home Buyers’ GST Rebate
If you are a FTHB, 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.
The FTHB GST Rebate will apply to the same types of housing and apply similar eligibility criteria and conditions as the existing GST/HST New Housing Rebate, with certain modifications to ensure that the rebate is targeted at first-time home buyers.
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 proceeding calendar years.
Together with the existing GST/HST New Housing Rebate (where that rebate is applicable), the FTHB GST Rebate would provide for a rebate of 100% of the GST on new homes valued up to $1 million.
The FTHB GST Rebate would be phased out in a linear manner for new homes valued between $1 million and $1.5 million. FOr example, under the linear phase-out, a home valued at $1.25 million would be eligible for a 50% GST rebate (a rebate of up to $25,000).
For questions or concerns, please reach out to Chris Bodnar.