The New First‑Time Home Buyers’ GST/HST Rebate: What Canadian Buyers Need to Know

If you’re a first‑time home buyer in Canada and thinking about purchasing a newly built home, there’s an important new program you need to know about. The federal government has officially rolled out the First‑Time Home Buyers’ GST/HST Rebate, a measure designed to significantly reduce the tax burden on new homes—and in some cases, save buyers tens of thousands of dollars.

Here’s a clear breakdown of what the rebate is, how it works, who qualifies, and how to claim it, so you know exactly where you stand.

What Is the First‑Time Home Buyers’ GST/HST Rebate?

The First‑Time Home Buyers’ (FTHB) GST/HST Rebate eliminates or reduces the federal portion of GST or HST paid by eligible first‑time buyers when purchasing a newly constructed or substantially renovated home.

This rebate is separate from (and stacks on top of) the existing GST/HST New Housing Rebate, making it a powerful affordability tool for first‑time buyers.

How Much Is the Rebate Worth?

The amount you receive depends on the purchase price of the home:

• Homes priced up to $1,000,000✅ Eligible buyers can receive a rebate equal to 100% of the federal GST, up to a maximum of $50,000

• Homes priced between $1,000,000 and $1,500,000✅ The rebate is gradually reduced as the price increases

• Homes priced over $1,500,000❌ No rebate available

This means that for many first‑time buyers purchasing a new home under $1 million, the entire federal GST is effectively eliminated.

A Big Bonus for Ontario Buyers

In provinces that use HST—especially Ontario—the savings can be even larger.

Eligible first‑time buyers in Ontario can receive:

• The full federal GST rebate (up to $50,000), plus

• A rebate of the 8% provincial portion of the HST

When combined, this can result in total tax savings of up to approximately $130,000 on qualifying new‑build homes in Ontario.

Who Is Considered a First‑Time Home Buyer?

For this rebate, you are generally considered a first‑time home buyer if:

• You have never owned and lived in a home that you or your spouse/common‑law partner owned

• In the year of purchase or any of the previous four calendar years

• The home will be your principal residence

This definition aligns with other CRA first‑time buyer programs and is strictly applied.

What Types of Homes Qualify?

To be eligible, the home must be:

• Newly constructed or substantially renovated

• Located in Canada

• Purchased from a builder, or built by you (owner‑built homes)

• Intended to be your primary residence

Resale homes do not qualify for this particular rebate.

Important Dates You Must Know

Timing matters with this rebate, and this is where many buyers get tripped up.

• The agreement of purchase and sale must be signed on or after March 20, 2025

• The rebate applies to qualifying agreements signed before 2031

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

Because the legislation did not receive Royal Assent until May 27, 2025, buyers who signed agreements between March 20 and May 26, 2025 must apply directly through the CRA, even if the builder did not credit the rebate at closing.

How Do You Receive the Rebate?

There are two ways the rebate is applied:

1. Builder Credits the Rebate at Closing

In many cases, builders can apply the rebate directly at closing, reducing the amount you need to pay upfront.

2. Buyer Applies Directly to the CRA

If the builder did not apply the rebate:

• You can apply through your CRA My Account, or

• Submit Form GST190 (for homes purchased from a builder)

• Owner‑built homes use Form GST191

Most buyers have up to two years from the date they take possession (or complete construction) to submit their claim.

Common Mistakes to Avoid

• ❌ Assuming resale homes qualify (they don’t)

• ❌ Missing the purchase‑agreement date requirement

• ❌ Not confirming whether the builder credited the rebate

• ❌ Missing the two‑year application deadline

Because this rebate can be worth tens of thousands of dollars, even small errors can be costly.

Why This Rebate Matters

For first‑time buyers, this rebate can:

• Reduce the total purchase price

• Lower the amount needed at closing

• Improve mortgage affordability

• Make new‑build homes more accessible in today’s market

It’s one of the largest tax‑based housing incentives introduced in years, and it’s especially impactful for buyers in higher‑cost provinces.

Thinking about buying your first home?

Understanding how and when this rebate applies before you sign can make a massive difference.

If you’re considering a new build and want to make sure you qualify—and claim every dollar available—getting the right guidance early is key.