GST Rebate Introduced for First-Time Home Buyers of New Homes Up to $1.5 Million
The federal government announced on May 27, 2025, a new Goods and Services Tax (GST) rebate for first-time home buyers on new homes valued up to $1.5 million. The measure was introduced by François-Philippe Champagne, Minister of Finance and National Revenue, through proposed amendments to the Excise Tax Act.
According to the Department of Finance Canada, the rebate is expected to deliver up to $3.9 billion in tax savings over five years, starting in 2025-26. The department stated that eligible first-time home buyers could save as much as $50,000 on a new home through this rebate program.
To qualify, an individual must be at least 18 years old, be either a Canadian citizen or permanent resident, and must not have lived in a home they owned or that their spouse or common-law partner owned in the present or previous four calendar years. The rebate applies to those who purchase a new home from a builder, build or hire someone to build a home on their own land, or buy shares in a cooperative housing corporation.
The rebate covers 100% of the GST paid on new homes valued up to $1 million. For homes priced between $1 million and $1.5 million, the rebate amount is reduced on a linear scale. For example, a home valued at $1.25 million would qualify for a 50% GST rebate, up to $25,000. No rebate is available for homes valued at $1.5 million or more.
For purchases from a builder, the agreement of purchase and sale must be entered into on or after May 27, 2025, and before 2031. Construction must begin before 2031 and the home must be substantially completed before 2036. Similar timing rules apply to owner-built homes and cooperative housing shares.
The rebate can be claimed only once per individual. It is not available if a spouse or common-law partner has previously claimed the rebate. The Department of Finance Canada outlined further restrictions, such as ineligibility for assignment sales and for agreements of purchase and sale originally entered into before May 27, 2025, even if cancelled or altered after that date.