Get Rebate on New Home – 2025 GST Rebate for Canadian First Time Home Buyer

Are you a first-time home buyer in Canada? You could soon save up to $50,000 on your new home purchase thanks to the 2025 First-Time Home Buyer (FTHB) GST Rebate. This new federal initiative is designed to help more Canadians enter the housing market by significantly reducing upfront tax costs on new homes.

Here’s what you need to know about the rebate, eligibility, how it works, and how to make the most of it.

What’s Changing? A Major Boost in Tax Savings

Under the current GST/HST system, buyers of newly constructed homes pay a federal tax, which can add tens of thousands of dollars to their final cost. The new FTHB GST Rebate introduces a 100% rebate of the federal portion of GST on eligible new homes priced up to $1 million, with a phase-out rebate for homes priced between $1 million and $1.5 million.

This change is part of the Canadian government’s ongoing effort to improve housing affordability and support new buyers.

Who Qualifies as a First-Time Home Buyer to Get the Rebate on a New Home

To be eligible for the FTHB GST Rebate:

• At least one buyer must be a first-time home buyer, meaning they have never owned a home before.

• The home must be used as the primary place of residence.

• The buyer must be the first to occupy the home.

• The purchase must occur on or after May 27, 2025, and before 2031.

New Home Types Eligible for the GST Rebate

• Newly built homes purchased from builders.

• Owner-built homes.

• Shares in cooperative housing (co-ops).

How Does the GST Rebate Work

Breakdown of GST Rebate Savings

• 100% GST rebate for new homes priced up to $1 million.

• Phase-out rebate for homes priced between $1 million and $1.5 million.

• No rebate for homes priced above $1.5 million.

Example: A home priced at $900,000 may receive the full $45,000 (5% GST) rebate, while a $1.2 million home may qualify for a partial rebate, depending on the final price.

Limitations For The New Home GST Rebate

Not every purchase qualifies. Some disqualifying factors include:

• Agreements signed before May 27, 2025 (even if closing is later).

• Assignment sales where the original agreement was signed before May 27, 2025.

• Re-entered contracts: Cancelling and re-signing a pre-May 27 contract will not reset eligibility.

• The rebate is only available once per individual, and cannot be reused if a spouse or common-law partner has already claimed it.

• The co-op property must not qualify for other rental housing GST rebates.

Timing & Next Steps

While announced, this rebate is pending legislative approval. Once passed:

• The rebate will apply to new agreements from May 27, 2025, through 2031.

• Construction must begin before 2031 and be substantially completed before 2036.

Homebuyers typically apply through their builder or claim directly from the CRA, depending on the type of purchase.

FAQs: Common Questions

Q: Can I claim the rebate if I buy with my parents? 

A: As long as one purchaser is a first-time buyer and will live there, possibly yes.

Q: Does this apply to resale homes? 

A: No. Only newly constructed homes qualify.

Q: Can I still apply if my spouse previously owned a home? 

A: No, if your spouse/common-law partner previously claimed a FTHB GST rebate, you're not eligible.

Additional Resources: New Home GST Rebate for First-Time Home Buyers:

• GST relief for first-time home buyers on new homes valued up to $1.5 million

• Government tables a Motion to bring down costs for Canadians