Tax Planning
Tax Planning for First-Time Home Buyers: Maximizing the GST/HST Rebate
Bill C-4, now law, offers a significant opportunity for first-time home buyers to cut costs via a GST/HST rebate on new homes. Learn how to qualify, calculate savings, and apply effectively.
By NomadicTax Research Team • 5-8 min read • April 6, 2026
## 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](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai)) 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](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai))
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## 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](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai))
- 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](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai))
Note: Resale homes do **not** qualify for this rebate under this provision.
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## 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](https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html?utm_source=openai))
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.
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## Filing & Claiming: Actionable Steps
1. **Ensure your purchase agreement date qualifies** (on or after March 20, 2025).
2. **Check if your home is “new” or under construction**. Document accordingly.
3. In your tax return, claim the **GST/HST First-Time Home Buyers’ Rebate**, using form GST370 or its provincial equivalent.
4. Keep detailed invoices and closing documents showing GST/HST paid.
5. If you do business with contractors, verify they submit GST/HST correctly and collect required invoices or receipts.
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## 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.
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## 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**.
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## 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.