Compliance
Compliance Alert: GST/HST Rebate for First-Time Home Buyers under Bill C-4
With the Royal Assent of Bill C-4, new rules transform the GST/HST rebate for first-time home buyers—understand eligibility, value, and how to avoid pitfalls.
By NomadicTax Research Team • 5-8 min read • May 31, 2026
## Overview of Bill C-4 Reforms
The **Making Life More Affordable for Canadians Act** (Bill C-4) received Royal Assent on **March 12, 2026**, enacting sweeping changes including a **new first-time home buyers’ (FTHB) GST/HST rebate**. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai)) Under the new rules:
- 100% of the GST or federal part of HST is **eliminated** for first-time buyers purchasing new homes priced up to **$1 million**.
- For homes between **$1 million and $1.5 million**, the rebate phases out gradually. Homes valued at $1.5 million or more receive no rebate. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/news122/news122-excise-gst-hst-news-no-122.html?utm_source=openai))
## Who Must Comply
- **Individuals and families** who’ve never owned a primary residence in the year of purchase or in the four preceding years.
- **Buyers of new or substantially renovated housing**, whether single-unit homes or condominium units. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/news122/news122-excise-gst-hst-news-no-122.html?utm_source=openai))
- **Not available** to corporations or partnerships under current federal provisions. Provincial rebates may apply separately. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/new-housing-rebate.html?utm_source=openai))
## Implications for Buyers & Professionals
- Make sure to confirm **purchase agreement dates**: the rebate applies to homes bought **from the builder** under agreements entered on or after **March 20, 2025**, and before **2031**. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai))
- Buyers with homes in the $1-$1.5 million range need to calculate their partial rebate—account for FMV and phase-out thresholds.
- Realtors, lawyers, and builders must update purchase contract disclosures to reflect new rebate availability and eligibility criteria.
## Pitfalls & Errors to Avoid
- Forgetting to check **primary residence test**: if the buyer or spouse owned any home in the specified timeframe, they may be ineligible.
- Failing to claim the rebate via the correct federal form under Bill C-4 or missing the provincial part of HST for provinces where applicable. Keep all documentation on renovations if applicable.
- Misunderstanding FMV valuation: for homes between $1 million and $1.5 million, accurate fair market value (or purchase price, if lower) is critical in determining rebate eligibility.
## Sample Case Study
Alex and Jordan are first-time home buyers who purchase a newly built condo in Calgary for **$1.2 million** on **June 15, 2025**. Since it falls between $1m and $1.5m, they qualify for a **partial federal rebate**. If full rebate on the GST is for amounts ≤ $1 million, and phase-out applies gradually, they’ll recover a reduced amount proportional to how far over $1 million they are. Alex and Jordan must submit proper rebate claim when filing, and retain builder’s invoice or valuation.
## Key Takeaways for Compliance
- As a buyer: ensure you meet the *first-time buyer definition* and purchase date criteria.
- As a tax preparer or real estate professional: update client guidance materials to reflect the new rebate structure, thresholds, and claiming process.
- Review CRA documentation like **News 122** and **Excise & GST/HST** bulletins to stay abreast of forms and legislative changes. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/news122/news122-excise-gst-hst-news-no-122.html?utm_source=openai))