Canada’s GST Exemption for New Homes (2025): What First-Time Buyers Need to Know
A New Era for Homebuyer Affordability
In response to soaring real estate prices, the Canadian government has introduced a relief measure: a full GST exemption for first-time homebuyers on new or substantially renovated homes—up to a base price of $1 million. Homes valued between $1 million and $1.5 million qualify for a phased rebate. But to benefit from this, key timing and eligibility requirements must be met.
This initiative is part of Bill C-4, Making Life More Affordable for Canadians Act, which signals a strategic move to ease entry into homeownership.(fasken.com)
Who Qualifies?
To be eligible for the FTHB GST Rebate (First-Time Home Buyer GST Rebate), you must:
- Be 18 or older, and a Canadian citizen or permanent resident
- Be a first-time homebuyer—you (and your spouse or partner) must not have owned or lived in a home as your primary residence in the current or past four calendar years(Canada.ca, KPMG Assets)
- Acquire the property for use as your primary residence, and be the first occupant following construction or renovation
What Homes Qualify?
This rebate applies to:
- New homes purchased from a builder
- Owner-built or substantially renovated homes, where you (or someone you hire) built or renovated the home(Canada.ca, Dentons)
- Cooperative housing shares, where you're acquiring a unit for personal use(Canada.ca)
How Much Can You Save?
- Up to 100% of GST (i.e., up to $50,000) on homes up to $1 million
- Gradual phase-out for homes between $1 million and $1.5 million (e.g., at $1.25M, you would receive ~$25,000)(Canada.ca)
- No rebate for homes $1.5 million and above.
Timing Matters: Don’t Miss These Windows!
To receive the rebate:
- The agreement of purchase and sale must be signed on or after May 27, 2025, and before 2031
- Construction must begin before 2031 and be substantially completed by 2036
- The ownership transfer must also occur by 2036
Important Caveats
- Agreements made before May 27, 2025—even if cancelled or re-entered later—do not qualify
- The rebate is a one-time benefit—you (and your spouse/partner) can only claim it once in a lifetime
Builders & Buyers: What You Should Know
Builders can pass the rebate directly to buyers—making it even more appealing. However, both builders and buyers should ensure:
- The purchaser truly qualifies as a first-time buyer
- Agreements comply fully with timing and eligibility rules
- Any assignment, termination, or re-signing doesn’t inadvertently disqualify the deal
Why This Matters—In One Snapshot
| Feature | Details |
|---|---|
| Eligibility | First-time buyer, age 18+, resident |
| Home Types | New build, owner-built, co-op |
| Maximum Benefit | $50,000 GST rebate |
| Price Thresholds | ≤ $1M full rebate; ≤ $1.5M phased; > $1.5M no rebate |
| Timing & Conditions | Purchase & build within 2025–2036 |
| Claim Frequency | One-time only per individual |
Bottom Line
This GST exemption is a massive opportunity for new Canadians and first-time buyers to save up to $50,000 on their new homes—helping ease the entry into real estate ownership. Ensure your purchase agreement is dated on or after May 27, 2025, and that you meet all guidelines.
*This article is for information purpose only. You should seek professional advise from an accountant or lawyer for your eligibility. E.&O.E.
