On May 27, 2025, the federal government introduced a new GST rebate for first-time homebuyers, eliminating GST on new homes under $1 million. Homes priced between $1M and $1.5M will receive a partial rebate, phasing out as the price increases. For example, a $1.25M home qualifies for a 50% rebate, saving buyers up to $25,000.

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Eligible buyers must be Canadian citizens or permanent residents over 18, who haven’t owned a home in the past 4 years. The rebate applies to new homes purchased from builders, owner-built homes, and qualifying cooperative housing units—provided the home becomes the buyer’s primary residence and the buyer occupies it. Key eligibility dates are between May 27, 2025 and 2031, with construction required to finish before 2036.

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The rebate can’t be claimed more than once per lifetime or if a spouse has already used it. It also doesn’t apply to homes purchased under contracts signed before May 27, 2025, or to co-op units already eligible for a full rental rebate.

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Industry reaction is mixed. While developers and industry associations welcome the rebate, they argue it doesn’t go far enough. Many urge broader eligibility to improve affordability and further stimulate construction of new housing supply.

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