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Navigating the First-Time Home Buyers’ GST Rebate: Eligibility, Savings, and Limitations

A new GST/HST rebate proposal aims to ease the burden for first-time buyers of new homes. Learn whether you're eligible and how much you can save.

By NomadicTax Research Team • 5-8 min read • November 21, 2025

## What is the First-Time Home Buyers’ (FTHB) GST/HST Rebate? The Government of Canada has proposed a regulation change, currently before Parliament (Bill C-4), to introduce a **GST/HST Rebate** for **first-time home buyers** purchasing **new homes**. The rebate would: - **Eliminate** the GST (or federal HST portion) on new homes valued up to **$1 million**.([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)) - **Phase out** the rebate gradually for homes valued **between $1 million and $1.5 million**, with a linear reduction. For example, a $1.25 million home would qualify for **50%** of the maximum rebate.([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)) - No rebate is available for homes priced at **$1.5 million or more**.([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)) --- ## Who Qualifies? Key Eligibility Criteria A potential eligible first-time home buyer should: - Be **18 years or older**, a **Canadian citizen** or **permanent resident**.([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)) - Not have owned a home anywhere, whether in Canada or outside, in **the calendar year or any of the four previous years**.([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)) - Purchase a **new home from a builder**, or build one (owner-built), or buy shares of a **co-operative housing corporation**. The home must be substantially completed before or by certain dates (construction timeline rules apply).([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)) - Use the home as their **primary residence** immediately upon completion/purchase.([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)) --- ## How Much Can You Save - For homes up to **$1 million**, the rebate could reduce the federal/ GST portion by **100%** (up to ~$50,000).([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)) - For homes between **$1 million and $1.5 million**, the rebate amount tapers off linearly. A $1.25 million home earns **50%** of the maximum benefit (approx. $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)) - For homes valued $1.5 million or more, there’s **no federal rebate under this proposal**. Provincial or HST portions may still apply depending on your province.([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)) --- ## Limitations & Stay-tuned Warnings - **Not yet in force**. This rebate is still **proposed legislation** and not yet active or available for applications.([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 covers the federal GST or the federal component of HST**; the provincial portion (or full HST) may still apply where applicable.([canada.ca](https://www.canada.ca/en/department-finance/corporate/transparency/2025/cow-cp-scenario-notes-eng.html?utm_source=openai)) - **Time-bound construction and purchase windows**: Agreements must be entered **on or after May 27, 2025**, and for homes built/constructed before certain deadlines (often before 2031 or 2036 in some cases).([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)) - **Limited to first-time buyers only**: No other historical homeowner ownership in the past four years. Spouses/common-law partner’s ownership counts.([canada.ca](https://www.canada.ca/en/department-finance/corporate/transparency/2025/cow-cp-scenario-notes-eng.html?utm_source=openai)) --- ## Actionable Steps If You Want to Use It 1. **Monitor legislative progress**: Watch for sunsets or Royal Assent on Bill C-4 to confirm when the rebate becomes active. 2. **Check purchase dates**: Ensure your agreement with builder or construction timeline meets the effective dates. 3. **Consult with your province**: HST provinces may have different treatments; check local rebate applicability. 4. **Budget for ancillary costs**: Even if GST is eliminated federally, other costs like land transfer taxes, provincial fees, and closing costs may still apply. 5. **Speak with real estate lawyers or tax professionals** if your purchase is complex (co-operative, owner-built, renovations/former‐buildings). Now is the time to plan if you're entering the market in the next few years. --- ## Bottom Line This proposed GST/HST rebate delivers meaningful savings and could significantly lower entry-thresholds for many first-time home buyers. The opportunity is especially useful if you're planning now—and have until 2025–2031 windows to act. Prepare early, qualify carefully, and lock in your purchase in alignment with proposed legislative timeframes.