Federal government officially announces GST relief for first-time buyers

The federal government has introduced a new GST rebate for first-time home buyers (named the “FTHB GST Rebate”), which will remove the GST on new homes at or under $1 million and lower it on homes between $1 million and $1.5 million for all first-time home buyers, effective May 27, 2025. The move should get prospective first-time buyers who were waiting on the sidelines for more details to get into the market, spurring sales and housing supply. 

​Details About the GST Rebate for first-time home buyers (the “FTHB GST Rebate”)

• Available to first-time home buyers (FTHB), defined by the government as:
  • at least 18 years of age;
  • either a Canadian citizen or a permanent resident of Canada; and
  • has 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 preceding calendar years.
• Eligible for FTHB who:
  • buy a new home from a builder;
  • build, or hire someone else to build, a home on land the FTHB owns or leases; or
  • buy shares of a co-operative housing corporation.
• 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).

Details About New Homes Purchased from a Builder

• The FTHB GST Rebate would allow an individual to recover up to $50,000 of the GST (or the federal part of the HST) paid in respect of a new home purchased from a builder (including on leased land).
• To qualify for a FTHB GST Rebate, at least one of the purchasers of the home would need to be a “first-time home buyer” that is acquiring the new home for use as their primary place of residence. That individual would also need to be the first individual to occupy the home as a place of residence.

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