Great news for those dreaming of their first new home! The federal government has just tabled legislative proposals that could make future homeowners smile. Please note, however: these measures are not yet in effect - they are currently proposals awaiting adoption by Parliament.
The Big Proposed Change: Goodbye GST for First-Time Buyers
On May 27, 2025, the Department of Finance published legislative proposals to create a new temporary GST rebate. If these proposals are adopted, first-time home buyers could say goodbye to GST (5%) on their new home, provided it's worth less than one million dollars. And for those aiming higher? The rebate would gradually decrease for properties between 1 and 1.5 million dollars.
Concretely, this would represent savings of up to $50,000 on the purchase of a new home - enough to make a real difference in the budget!
Eligibility Criteria as a First-Time Home Buyer
To benefit from this rebate, you must be classified as a first-time home buyer, which means:
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Be at least 18 years old
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Be a Canadian citizen or permanent resident of Canada
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Not have lived in a home you owned (or that your spouse/common-law partner owned) during the current calendar year or the previous four calendar years, whether in Canada or abroad
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Be the first occupant of the home after construction is completed
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See official link below for all official rules and limits
Types of Eligible Homes
The rebate applies to:
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New homes purchased from a builder (land and building)
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Homes built by the owner or by a contracted builder
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Shares in a housing co-op
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New mobile or floating homes
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Homes that have undergone major renovations (at least 90% of the interior replaced)
Price Limits and Rebate Amounts
| Home Value | GST Rebate |
|---|---|
| Up to $1,000,000 | 100% of GST (up to $50,000) |
| $1,000,001 to $1,499,999 | Gradual reduction (ex: $25,000 for a $1,250,000 home) |
| $1,500,000 and up | No rebate |
Timing Requirements
To qualify, purchases must meet strict deadlines:
For homes purchased from a builder:
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Sales contract signed on or after May 27, 2025, and before 2031
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Construction started before 2031
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Construction substantially completed before 2036
For owner-built homes:
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Construction or renovations started on or after May 27, 2025, and before 2031
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Work substantially completed before 2036
Current Rebates Remain in Place
Rest assured, existing rebates wouldn't disappear! For those who aren't first-time buyers, current credits would remain, even though many transactions now exceed current thresholds due to rising prices.
Legislative Status: Awaiting Adoption
It's crucial to understand that these measures are not yet in effect. The government has tabled a notice of ways and means motion in Parliament, but the bill still needs to be adopted. The Canada Revenue Agency has not yet provided details on how it intends to administer these rules.
To Watch: Will the Provinces Follow Suit?
One question remains: would provinces that apply HST offer a similar rebate for their provincial portion? For now, only the federal portion is targeted by these proposals.
This proposed temporary measure, which would extend until 2031 for contracts and 2036 for construction completion, would mark an important turning point in government assistance for homeownership - if adopted! In the meantime, future buyers will have to wait to see if these election promises materialize into law.
Official Government page:
Read our article about New Homes Sales Taxes
