Effective for qualifying new homes purchased on or after March 20, 2025, the Government of Canada introduced a new Federal GST First-Time Home Buyers Rebate. The rebate may allow eligible first-time home buyers to recover some or all of the GST, or the federal portion of the HST, paid on a newly constructed home.
How Much Is the Rebate?
The rebate may be available for newly constructed homes with a value of up to $1.5 million.
Generally:
- Homes valued at $1 million or less may qualify for the maximum rebate.
- Homes valued between $1 million and $1.5 million may qualify for a reduced rebate.
- Homes valued at $1.5 million or more do not qualify.
The rebate applies only to the federal portion of the GST/HST.
Who Qualifies for the Rebate?
To qualify, an individual generally must:
- Be at least 18 years of age;
- Be a Canadian citizen or permanent resident of Canada; and
- Not have lived in a home, anywhere in the world, that they owned or that their spouse or common-law partner owned as their primary place of residence during the current calendar year or the preceding four calendar years.
This last requirement is particularly important. Even if a spouse or common-law partner is not acquiring the new property, their prior home ownership history may affect eligibility.
What Types of Homes Qualify?
The rebate may apply to:
- Newly constructed homes purchased from a builder;
- Substantially renovated homes purchased from a builder;
- Owner-built homes;
- Certain condominium units;
- Townhouses;
- Mobile homes and modular homes; and
- Floating homes.
Additional eligibility requirements apply depending on the type of property and how it is acquired.
Primary Residence Requirement
The home must be acquired or built for use as the first-time home buyer’s primary place of residence.
A vacation property, recreational property, or investment property will generally not qualify.
Multiple Buyers
More than one person may purchase a home together.
To qualify for the rebate, at least one of the owners must meet the definition of a first-time home buyer and must occupy the home as their primary place of residence.
However, that individual must independently satisfy all first-time home buyer requirements, including the rule that they must not have lived in a home owned by themselves or their spouse or common-law partner during the applicable four-year period.
Owner-Built Homes
The rebate may also be available where an individual builds or substantially renovates their own home.
Additional requirements apply, including timing requirements relating to the commencement and completion of construction and occupancy of the home.
Important Reminder
Eligibility for the First-Time Home Buyers’ GST/HST Rebate depends on a number of factors, including ownership history, occupancy, marital or common-law status, and the nature of the property being acquired.
If you are purchasing a newly constructed home and believe you may qualify, you should seek advice before completing your purchase to ensure all eligibility requirements are satisfied.
This article is provided for general information only and is not legal, tax, or accounting advice. Eligibility for the rebate is determined by the Canada Revenue Agency based on the applicable legislation and your specific circumstances.
For additional information regarding the Federal GST First-Time Home Buyers Rebate, visit the Canada Revenue Agency website: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate/what-rebate.html.