Compliance
Navigating Canada’s First-Time Home Buyers’ GST Rebate: A Compliance Guide
The newly proposed First-Time Home Buyers’ GST rebate could cut upfront costs by up to $50,000—learn what the rules are and how to stay compliant.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## What Is the First-Time Home Buyers (FTHB) GST/HST Rebate?
As part of **Budget 2025**, the Canadian government has proposed a new **GST rebate** to assist first-time home buyers. The rebate would:
- **Eliminate the 5 % GST (or federal portion of the HST)** on new homes up to **CAD $1 million**.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
- Provide **reduced GST** for home prices between **$1 million and $1.5 million**, phased out gradually.([canada.ca](https://www.canada.ca/en/department-finance/news/2025/05/gst-relief-for-first-time-home-buyers-on-new-homes-valued-up-to-15-million.html?utm_source=openai))
- Apply alongside the existing **GST/HST new housing rebate** where applicable. The new FTHB rebate serves as a “top-up.”([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
Note: This is **proposed legislation** — it has not yet received Royal Assent.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
## Who Qualifies — Key Criteria
To be considered an eligible first-time home buyer under this proposed rebate:
1. **Age and status**: Be at least **18 years old**; a **Canadian citizen or permanent resident**.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
2. **Didn’t own a home** in the year of purchase or in the previous **four calendar years**—neither you nor your spouse/common-law partner owned a principal residence anywhere.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
3. The property must be **a new home or substantially renovated**, used as your **primary place of residence**. Homes from builders, co-ops, or owner-built with leased land qualify under conditions.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
4. The agreement of purchase must be entered **on or after May 27, 2025 and before 2031**, and construction must begin before 2031 and substantially complete before 2036.([canada.ca](https://www.canada.ca/en/department-finance/news/2025/05/gst-relief-for-first-time-home-buyers-on-new-homes-valued-up-to-15-million.html?utm_source=openai))
## How Much Can You Get — Rebate Examples
| Home Price | Rebate Amount | Notes |
|------------|----------------|--------|
| ≤ $1,000,000 | 100% of GST paid (max **$50,000**) | Full elimination of federal GST part.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai)) |
| Between $1,000,000–$1,500,000 | Proportional rebate | Phased out linearly. E.g. $1.25M home gets 50% rebate ~ $25,000.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai)) |
| $1,500,000 or more | No rebate under this program | No application – cutoff applies.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai)) |
## Compliance Checklist
To ensure your claim is valid, keep in mind:
- **Documents** like purchase agreements, completion certificates, builder invoices, and proof of primary residence will be essential.
- **Timing matters**: Ownership transfer, construction start, and substantial completion dates all affect eligibility.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
- **Never owned** rule is strict—if you or your spouse/common-law owned any primary residence within prior four years, you’re ineligible.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
- Only the **federal portion** of GST/HST is affected. Provincial components of HST are not eligible.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
- Wait for the legislation to receive **Royal Assent**. Claims are only possible after that.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
## Planning Tips and Common Scenarios
- Buying a new build vs renovating: whereas builder purchases follow certain rules for start dates and substantial completion, owner-built homes have their own set of criteria. Plan early.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
- **High-cost metro areas**: the rebate still works for homes between $1M and $1.5M, even in cities like Vancouver or Toronto—but expect phased reduction.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
- Married or common-law partners: only one partner needs to satisfy “first-time home buyer” status, but joint ownership rules apply. Split ownership structures can complicate eligibility.
## Staying Current
Since this policy is still under review:
- Monitor the status of **Bill C-4**, which contains this measure.([budget.canada.ca](https://www.budget.canada.ca/2025/report-rapport/chap3-en.html?utm_source=openai))
- Look for updated CRA application forms and guides once the bills receive Royal Assent. Supervising agencies will issue guidance.([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html?utm_source=openai))
By understanding these rules now, first-time home buyers can better plan purchase timing, financing, and contracts to maximize savings under the proposed FTHB GST rebate.