​What You Need To Know About The Feds' New GST Rebate For First-Time Buyers

On May 27, 2025, Canada’s federal government introduced a new rebate targeting first-time homebuyers: a full Goods and Services Tax (GST) relief on new homes under $1 million and a partial rebate on homes up to $1.5 million. The goal is to reduce upfront costs and save eligible buyers as much as $50,000, easing the path into the housing market. This benefit applies whether the home is built by a developer, owner-built, or part of a co-operative housing share purchase.

To qualify, buyers must be at least 18, be Canadian citizens or permanent residents, and meet a strict “first‑time” definition: not owning a home — domestically or abroad — in the year of purchase or during the previous four years. The rebate applies to new homes bought after May 27, 2025, with construction starting before 2031 and substantial completion by 2036. For owner-built homes or co-ops, buyers should also be first occupants, and the co-op must not already qualify for a full 100% GST rebate.

This rebate extends to different purchase scenarios. For builder-built homes, eligibility requires completion of the purchase agreement after May 27, 2025, and none of the buyers should have lived in a previous home. Owner-builders may claim back up to $50,000 of GST or federal HST paid during construction. In co-op situations, buyers can claim the rebate on the portion of GST paid for their unit — provided the co-op isn’t already fully rebated under existing rules.

But there are limits. Buyers can claim this rebate only once in a lifetime, and if a spouse or partner has already used it, they’re ineligible. Assignment sales don’t qualify if the original purchase agreement predates May 27, 2025. Also, if a sale falls through and a new agreement is signed after the eligibility date, that could negate the rebate.

Industry response has been mixed. Housing groups like BILD and the Canadian Home Builders’ Association support the initiative but say it’s too narrow. A Parliamentary Budget Office analysis noted that only around 13,000 homes per year would qualify under current rules — a figure that would balloon to 60,000–65,000 if all owner-occupiers were included. Critics urge for broader eligibility and indexing of price thresholds, especially in high-cost cities.

Economists caution that expanding the rebate to all buyers could strain public funds and risk inflating housing prices. Yet many argue the benefits of increased construction activity—jobs, taxes, and economic spin-off—would offset the initial cost. As Canada digs deeper into its housing challenges, this targeted GST rebate may be a step forward for first-timers — but whether it’s bold enough remains to be seen.