On May 27, 2025, the Federal Government issued a press release that provides for a Goods and Services Tax (“GST”) rebate for first time home buyers (FTHB) of new homes (and co-ops). The press release indicates that the Excise Tax Act will be amended to provide FTHB with a full GST rebate on homes under $1,000,000, and a partial rebate on homes between $1,000,000 and $1,500,000.
Subject to agreement with the Builder, a FTHB will pay the GST on the closing of a purchase of a qualifying home, but will be eligible for a rebate of the full amount (up to $50,000). The rebate is phased out in a linear manner from $1,000,000 to $1,500,000. So, for example, a home that is $1,400,000 would lose 80% of the rebate – in other words, it would still be eligible for a 20% ($10,000) rebate.
As the legislation has not yet been passed (and the devil is in the details), there are many questions we are unable to answer at this time. Below are some frequently asked questions we received, together with answers based on available materials. We will continue to provide updates as more details emerge.
A person is considered a FTHB if they
The agreement of purchase and sale must be entered into on or after May 27th, 2025 and before 2031. The construction of the home must begin before 2031 and is substantially completed before 2036. The rebate is not retroactive to contracts entered into prior to May 27th, 2025.
No. The contract must be entered into after May 27, 2025
Based on tabled legislation, this would be disallowed in respect of the sale of a new home under the new agreement (and would not be allowed in respect of the varied or altered agreement).
The rebate is calculated on the “pre-GST” purchase price and linearly moves from a full rebate (at $1,000,000) to zero rebate (at $1,500,000). If a purchase price was $1,200,000 (exclusive of GST) then the rebate will be $30,000. If a purchase price was $1,100,000 (exclusive of GST) then the rebate will be $40,000. If the purchase price was $1,300,000 (exclusive of GST) then the rebate will be $20,000.
Based on tabled legislation, there will be no benefit for the GST rebate to go on title as 99% / 1%. So long as one registered owner qualifies for the exemption, then the whole rebate applies.
Based on tabled legislation, if a FTBH assumes the rights and obligations of another person pursuant to an assignment sale, the FTHB rebate would not be available if the original agreement of purchase and sale was entered into before May 27th, 2025.
Based on tabled legislation, the FTHB GST rebate is available if:
Purchasing a vacant property from a person that purchased the property from a Builder would not qualify for the rebate.
The Government has tabled a notice of Ways and Means Motion in Parliament with proposals for a FTHB rebate. In other words, it is not yet law, but is likely to become law in short order.
The buyer will need to be in a position to pay the GST at closing and apply for a refund via the FTHB GST rebate at a later date, unless the developer has agreed to credit the rebate on closing.
The RRSP Home Buyers’ Program has a similar qualification for FTHB not to have owned a home in the preceding four calendar years. Even if a person has owned a home, so long as they have not owned the home within the preceding four years, they are considered a FTHB. While a person can quality to be a FTHB under the RRSP HBP more than once, the FTHB GST Rebate is available only once to the person and their spouse.
Unlike the FTHB PTT exemption, the FTHB GST rebate is not divisible and not based on ownership of the property.
For more information, please visit GST relief for first-time home buyers on new homes valued up to $1.5 million – Canada.ca