GST Relief for First-Time Home Buyers Proposed for New Homes Valued up to $1.5 Million

First-time home buyers in Canada who purchase new homes valued up to $1.5 million may be eligible for Goods and Services Tax (GST) relief under legislative proposals introduced by the Department of Finance Canada on May 27, 2025.

According to the Department of Finance Canada, the proposal applies to purchases of new homes from builders, owner-built homes, and shares in cooperative housing corporations. The department states that these changes to the Excise Tax Act are expected to deliver $3.9 billion in tax savings over five years, beginning in the 2025-26 fiscal year.

Under the proposed First-Time Home Buyers’ GST Rebate (FTHB GST Rebate), buyers can receive a rebate of up to $50,000 on GST for new homes valued up to $1 million. The rebate is reduced on homes valued between $1 million and $1.5 million; for example, a $1.25 million home purchase is eligible for a 50% GST rebate, up to $25,000. No rebate will be available for homes valued at $1.5 million or more.

To qualify, the department states that a first-time home buyer must be at least 18 years old, be a Canadian citizen or permanent resident, and not have lived in a home owned by themselves or their spouse or common-law partner in the calendar year or the four preceding calendar years.

The department notes that the rebate may be claimed on new home purchases from a builder, for homes an individual builds themselves or has built for them, or for shares in a co-operative that paid GST or the federal portion of HST on new housing. At least one purchaser must be a first-time home buyer and use the property as their primary residence. The agreement and construction must generally commence between May 27, 2025, and 2031, with the home’s completion required before 2036.

According to the Department of Finance Canada, each individual may claim the rebate only once in their lifetime and may not claim if their spouse or partner has previously claimed. The department says the rebate is not available for agreements made before May 27, 2025, for certain assignment sales, or for co-op shares that are already eligible for a 100% GST rebate for purpose-built rental housing.