GST Rebate for First-Time Home Buyers: What You Need to Know

Quick Answer

The federal government has introduced a new GST rebate for first-time home buyers in Canada, effective May 27, 2025, to make homeownership more affordable. This incentive offers a full rebate on the 5% federal GST for newly built homes priced at $1 million or less, potentially saving buyers up to $50,000. To qualify, buyers must be Canadian citizens or permanent residents, at least 18 years old, and purchasing the home as their primary residence without having owned a home in the past four years. The GST rebate aims to reduce financial barriers, supporting Canadians in achieving their homeownership goals by making new homes more accessible.

GST Rebate for First-Time Home Buyers: What You Need to Know

If you’re a first-time home buyer in Canada, there’s a major new incentive that could make your path to homeownership a lot more affordable. As of May 27, 2025, the federal government has introduced a GST rebate aimed at helping first-time buyers purchase newly built homes.

Here’s the breakdown: If you’re buying a brand-new home priced at $1 million or less, you’ll now be eligible for a full rebate on the 5% federal GST — which could mean savings of up to $50,000. Homes priced between $1 million and $1.5 million will still qualify, but the rebate amount will be gradually reduced the closer the price gets to that $1.5 million mark. Anything above $1.5 million won’t be eligible.

To qualify, buyers must be Canadian citizens or permanent residents, at least 18 years old, and purchasing a home they plan to use as their primary residence. You’ll also need to be a true first-time buyer — meaning you haven’t owned (or lived in) a home you or your partner owned in the past four years.

This rebate applies whether you’re buying directly from a builder, constructing a home on your own lot, or purchasing through a co-op.

The offer is available for homes purchased on or after May 27, 2025, with construction starting before 2031 and substantial completion before 2036.

This GST rebate initiative is a significant step toward making homeownership more accessible for first-time buyers in Canada. By reducing the financial barriers associated with purchasing a new home, the government aims to support Canadians in achieving their homeownership goals.

Frequently Asked Questions

1 How much can I save with the GST rebate for first-time home buyers?

For newly built homes priced at $1 million or less, you can receive a full rebate on the 5% federal GST, potentially saving up to $50,000. Homes priced between $1 million and $1.5 million will qualify for a gradually reduced rebate. Any home priced above $1.5 million will not be eligible for this rebate.

2 Who qualifies as a first-time home buyer for this GST rebate?

To qualify, you must be a Canadian citizen or permanent resident, at least 18 years old, and purchasing a home you intend to use as your primary residence. You must also be a true first-time buyer, meaning you haven't owned or lived in a home you or your partner owned in the past four years.

3 When does this new GST rebate for first-time home buyers come into effect?

This GST rebate is available for homes purchased on or after May 27, 2025. Additionally, the construction of the home must start before 2031 and be substantially completed before 2036 to be eligible.

4 What types of new homes are eligible for the GST rebate?

The rebate applies to newly built homes. You can qualify whether you are buying directly from a builder, constructing a home on your own lot, or purchasing through a co-op.