First Time Home Buyers’ GST Rebate – Explained (2025 Update)

🏠 What Is It?

In a bid to boost housing affordability, on May 27, 2025, the Government of Canada introduced a substantial Goods and Services Tax (GST) rebate for first-time home buyers (FTHB) purchasing or building a new home or acquiring a co-op share. This new measure, included in proposed amendments to the Excise Tax Act, allows eligible FTHBs to recover up to $50,000 in GST—or the federal portion of HST—on homes priced up to $1 million, with a phased rebate on homes up to $1.5 million.

 
📌 Who Qualifies?

To be eligible, you must:

  • Be 18 or older, a Canadian citizen or permanent resident
  • Be a first-time home buyer (you—or your spouse/common-law partner—must not have owned and lived in a home in the same or four previous calendar years)
  • Use the property as your primary residence
  • Be the first occupant of the new home

Additional rules include:

  • One-time lifetime claim per individual
  • Ineligibility if your spouse/partner previously claimed the rebate
  • No rebate on assignments if the original purchase agreement was signed before May 27, 2025
  • Agreements entered earlier and then cancelled or modified to qualify are deemed ineligible
 
🏘️ Which Properties Are Eligible?

The rebate applies to:

  1. New homes purchased from a builder
  2. Owner-built homes, including those built via hired contractors
  3. Shares in housing co-ops where GST/HST was paid on the housing unit

Eligibility requires the agreement to be entered on or after May 27, 2025, and before 2031, with construction starting by that date and substantial completion (and title transfer) by 2036.

 
💰 How Much Can You Save?
  • Homes up to $1M – 100% rebate (max ~ $50,000)
  • $1M–$1.5M – prorated rebate (e.g., $1.25M home = 50% rebate ≈ $25,000)
  • $1.5M+ – no rebate

Over five years (starting in 2025–26), this program is estimated to provide $3.9 billion in tax savings.

 
⏰ Important Dates

The First-Time Home Buyers’ GST Rebate was announced and proposed in legislation on May 27, 2025. From that date forward, agreements signed between May 27, 2025, and 2031 are eligible for the rebate. Construction on the home must begin before 2031, and the home must be substantially completed and ownership transferred to the buyer by 2036.


Note: Even if you signed an agreement earlier and later modified it, it’s still considered pre May 27 and ineligible.

 
🎯 Why It Matters
  • Huge upfront savings up to $50,000 can ease financial barrier for new buyers
  • Stimulates new housing supply, benefiting developers and buyers alike
  • Targets genuinely new buyers, reducing abuse through strict first-time and first-occupancy conditions
 
⚠️ Things to Watch
  • Builder/developer processes are still evolving—CRA guidelines on how rebates will be passed on are pending
  • Provincial HST component: most provinces haven’t indicated provincial sales tax relief alongside GST/HST rebate
  • Builder vigilance: agreements before May 27 are culled; modifications and assignments may disqualify rebates
 
✅ What You Should Do
  • If planning to buy new, ensure your agreement is negotiated after May 27, 2025
  • Confirm with your builder they understand and can apply the rebate at closing
  • Keep proof of first-time buyer status and first occupancy intent
  • Ask your tax advisor or lawyer to include clauses that protect your rebate eligibility
  • Follow updates from CRA on how rebate will be filed—forms and process may change
 

🏁 Final Word

The 2025 First Time Home Buyers’ GST Rebate is a powerful measure that can significantly lower costs for new homeowners—especially those opting for newly built homes. But you must strictly meet the eligibility rules and timing requirements, and coordination with builders and tax advisers is essential.

➡️ With savings of up to $50,000, this rebate could be the key to enabling your first-home dream—but only with proper planning and timely action. Contact Us Today!