Overview
The Canadian government has made buying your first home more affordable. Under Bill C-4, Making Life More Affordable for Canadians Act, the GST/HST on new homes is now eliminated or reduced for first-time buyers. (canada.ca) This means buyers of newly built homes—or even homes under construction who make an Agreement of Purchase and Sale after March 20, 2025—can see savings of up to $50,000. (canada.ca)
Who Qualifies?
You’ll be eligible if:
- You’re a first-time home buyer purchasing a newly built home or a home under construction.
- The agreement of purchase and sale was entered on or after March 20, 2025, and before 2031. (canada.ca)
- The price of the home is $1 million or less (GST/HST eliminated). Above $1 million but under $1.5 million, GST/HST is reduced, not fully eliminated. (canada.ca)
Note: Resale homes do not qualify for this rebate under this provision.
How Much You Can Save
- New home ≤ $1,000,000: No GST/HST to pay.
- New home between $1,000,001–$1,500,000: partial rebate on GST/HST.
- Savings up to $50,000 possible depending on province and HST rates. (canada.ca)
For example, suppose you buy a new home in Ontario for $1.2 million. The GST/HST portion (5% federal + provincial) might normally add ~$60,000; under the rebate scheme, you’d get relief on most of that cost.
Filing & Claiming: Actionable Steps
- Ensure your purchase agreement date qualifies (on or after March 20, 2025).
- Check if your home is “new” or under construction. Document accordingly.
- In your tax return, claim the GST/HST First-Time Home Buyers’ Rebate, using form GST370 or its provincial equivalent.
- Keep detailed invoices and closing documents showing GST/HST paid.
- If you do business with contractors, verify they submit GST/HST correctly and collect required invoices or receipts.
Potential Pitfalls & Tips
- Price thresholds matter: Over $1.5 million? No rebate.
- Non-resale homes only: Resale homes aren’t eligible.
- Timing: Ensure all paperwork (purchase agreement, construction contracts) meet the date requirements.
- Provincial HST overlay: Provinces with an HST (e.g., Ontario, Nova Scotia) will affect your savings compared to provinces where only GST applies.
- The CRA’s processing can lag: Early submission and proper documentation help avoid delays.
Example Scenario
Sarah and Tom are first-time buyers in British Columbia. They sign a purchase agreement for a newly built home costing $1.3 million on May 2025. GST (5%) and provincial tax (where applicable) would normally cost them ~$65,000. With the Bill C-4 rebate rules:
- GST eliminated entirely on homes up to $1M → they avoid approx $50,000 in taxes on that portion.
- For the $300,000 above threshold, they get a proportional rebate, reducing their GST/HST liability.
They must claim the First-Time Home Buyers’ Rebate on their 2025 returns, include purchase agreement details, and ensure the home is new or under construction. They could end up saving tens of thousands.
Why This Matters
This reform targets affordability for middle and low-income Canadians. It reduces barriers to home ownership, especially in expensive housing markets, and aligns with broader affordability relief in Bill C-4. With proper planning, first-time buyers maximize savings and avoid costly missteps.
Takeaway: If you’re buying your first home and it’s new, built, or under construction after March 20, 2025, use this rebate. Proper documentation and early action pay off.