The Way the First-Time Homebuyers GST Rebate Can Save Them Thousands on Their Purchase
Thinking of buying a new build home? Are you a first time home buyer (FTHB)? The new First-Time Homebuyer GST Rebate could put thousands back in your pocket, and it might help turn the tide for your financing to finally dive into homeownership.
TL;DR
- New GST rebate for first-time homebuyers applies to new homes and owner-built properties.
- 100% rebate of federal GST (up to $50,000) on homes priced ≤ $1 million.
- Partial rebate for homes priced between $1 million – $1.5 million, phased out linearly.
- No rebate for homes priced ≥ $1.5 million.
- Rebate applies once per person/persons, for agreements signed May 27, 2025–2030
What Is the New First-Time Homebuyer GST Rebate?
The new GST rebate for first-time homebuyers is part of Canada’s broader effort to make housing more affordable. Simply put, if you’re buying a newly built home or undertaking significant renovations, you might be eligible to get back some or all of the GST you pay. This is a federal incentive aimed at easing financial pressure for first-time buyers of newly built or owner-built homes. If you meet the criteria, you get a full or partial rebate on the 5% federal GST (or that portion of HST) on your purchase
Matt’s Stats: GST Rebate Quick Facts
- Max rebate: $50,000 GST on homes ≤ $1 million.
- Partial rebate: homes between $1 million–$1.5 million, phased out linearly.
- Zero rebate: homes ≥ $1.5 million.
- Valid for purchase agreements signed May 27, 2025 – Dec 31, 2030
Who Qualifies for the First-Time Homebuyer GST Rebate on New Build Homes?
You qualify if:
- You’re 18+ and a Canadian citizen or PR.
- You haven’t owned and occupied a home (or spouse hasn’t) in the current and prior 4 calendar years.
- The home will be your primary residence.
Eligible properties:
- New homes bought from a builder.
- Homes you build (or contract someone to build) on land you own or lease.
- Shares in a housing co‑op unit.
- Must fall under the purchase timeline (May 27, 2025– Dec 31 2030)
If you meet these criteria, you’re well on your way.
First-Time Homebuyer GST Rebate Breakdown:
How Much You Save
- 100% rebate (up to $50,000): homes priced at or below $1,000,000.
- Partial rebate: for homes priced between $1,000,001–$1,499,999, gradually reducing so a $1.25 million home nets ~$25,000
- No rebate: homes priced $1.5 million or more
Total possible savings max out at $50,000
Real-World Example: Calculating Your Savings
Imagine you’re eyeing a shiny new build home in Brantford priced at $900,000. The GST on this would typically be about 5%, or $45,000. With the rebate rules, you’d receive this entire amount back at closing, effectively shaving thousands off your purchase cost.
On a $1.2M home, you’d still get a substantial partial rebate of 50% of the maximum ($50,000) working out to approximately $25,000.
The Fine Print: What You Need to Know
Before you start mentally spending those rebate dollars, here’s the fine print:
- You must apply within two years of purchase.
- Only applies to your primary residence.
- The rebate applies only to GST, not PST or any other taxes or fees.
Always check with your lawyer or mortgage professional to ensure you’re eligible.
Is the First-Time Homebuyer GST Rebate Enough to Make a Difference?
Let’s be honest, every dollar counts when you’re trying to enter Ontario’s tough housing market. The GST rebate alone might not get you into your dream home, but combined with other incentives like the First-Time Home Buyer Incentive and land transfer tax rebates, it could make a significant impact.
Ready to Claim Your Rebate?
If you’re a first-time homebuyer wondering if you qualify, or if you have questions about your specific situation, I’m here to help. Reach out, and let’s get you into that new build!
Check out the Canada Revenue Agency New Housing Rebate guide for more information.