What the Proposal Entails
Budget 2025 seeks to offer a GST rebate for first-time home buyers on newly built homes:
- 100% relief of the Goods & Services Tax for new homes valued up to $1 million.
- Homes between $1 million and $1.5 million would get a partial rebate, phased-out linearly with a maximum cap of $50,000 relief.
- Homes at or above $1.5 million would not qualify.
- Only newly built homes from builders, homes built on land you own, or housing co-operative shares are eligible.
- Agreement of purchase must be made on or after May 27, 2025 and before 2031; construction must begin before 2031 and be substantially completed before 2036. (canada.ca)
Who Qualifies as a First-Time Home Buyer?
To be eligible:
- You must not have lived in a home you or your spouse owned in the calendar year of purchase or in any of the four preceding years.
- Be 18 years or older, a Canadian citizen or permanent resident.
- Buying from a builder, or building on owned land, or buying co-operative housing shares.
- The home must be your principal residence, and you or your partner must be the first occupant. (canada.ca)
Sample Savings Estimate
| House Price | GST Rate (5%) | Rebate Value | Out-of-Pocket GST Cost |
|---|---|---|---|
| $900,000 | 5% | $45,000 (full rebate) | $0 |
| $1,250,000 | 5% | $25,000 (partial rebate) | $31,250 |
| $1,700,000 | 5% | $0 (ineligible) | $85,000 |
Planning Tips and Practical Advice
- If you’re shopping for a new home and expecting to spend around $1 to $1.5 million, time your agreement of purchase after May 27, 2025 to qualify.
- Ensure builder, cooperative, or construction start dates align with eligibility windows.
- Maintain status as first-time home buyer—track previous home ownership both yours and spouse/common-law partner.
- Factor other costs—like land transfer tax, mortgage interest, closing costs—into savings calculations.
What’s Still to Be Determined
- Whether provincial governments will harmonize or adjust provincial sales tax / HST components.
- How the “new home from builder” is defined in complex cases like custom-built or modular homes.
- Whether co-operative housing share purchases will be administratively straightforward.
- Timing in legislation and whether Bill C-4 passes without amendments.
This rebate could significantly lower upfront costs for first-time buyers and make newly built homes more accessible. If you’re in the market now, align your purchase timeline and documentation to qualify for maximum benefit.