First-Time Home Buyers’ (FTHB) GST Rebate: Relief for New Home Purchases

Posted on October 15th, 2025 in Construction & Real Estate, Domestic Tax

a young couple both dressed in blue, holding a key to their first home

The government has proposed to provide GST relief on the purchase of new homes valued at up to $1.5 million by first-time home buyers. Eligible purchases would be entitled to a 100% GST rebate on homes valued at up to $1 million. The rebate would be phased out in a linear manner for homes valued between $1 million and $1.5 million. For example, a $1.25 million home would get a 50% rebate on the lesser of $50,000 (i.e. the GST on $1 million) and the actual GST paid.

Eligible acquisitions

The FTHB GST rebate would be available on purchases from a builder, owner-built homes, and on shares of cooperative housing corporations. It would generally be available in respect of a detached or semi-detached single-unit house, a duplex, a condominium unit, a townhouse, a unit in a co-operative housing corporation, a mobile home (including a modular home), and a floating home.

First-time home buyer

At least one of the purchasers must be a first-time home buyer who is not only acquiring/building the new home for use as their primary place of residence but also must be the first to occupy it as a place of residence. To be a first-time home buyer, the taxpayer would need to meet the following conditions:

be at least 18 years of age;
be either a Canadian citizen or a permanent resident of Canada; and
not have lived in a home, whether inside or outside Canada, that they owned or that their spouse or common-law partner owned in the calendar year or in the four preceding calendar years.

Acquisition date

For those acquiring the home from a builder, the purchase agreement must have been entered into between May 27, 2025, to December 31, 2030, inclusive. For owner-built homes, construction must begin no earlier than May 27, 2025. In both cases, construction must begin before 2031, and be substantially completed before 2036.

Limitations

A taxpayer would not be permitted to claim an FTHB GST rebate if they or their spouse or common-law partner had previously claimed an FTHB GST rebate. If the home was acquired pursuant to an assignment sale, the original purchase agreement cannot have been entered into before May 27, 2025. There is also an anti-avoidance measure that prevents the cancellation of an agreement before May 27, 2025, and a replacement agreement entered into on or after that date.

Be aware of this new incentive for first-time home buyers.

Download

Article originally published in: Tax Tips & Traps 2025 Third Quarter – Issue 151.