Potential Savings for First-Time Home Buyers: The New FTHB GST/HST Rebate
As highlighted on a recent episode of the REAL TIME podcast, Canada has a housing supply gap. A new federal initiative offers a glimmer of hope for aspiring homeowners.
In response to industry advocacy and public demand, the Government of Canada has introduced legislation proposing a new GST/HST rebate for first-time home buyers (FTHB)—a move aimed at stimulating new construction and easing the path to ownership.
This rebate complements the existing GST/HST New Housing Rebate, offering additional financial relief to qualified buyers.
For Janice Myers, CREA’s CEO, this is a meaningful step toward addressing affordability and unlocking supply. “This is a win for first-time home buyers,” she said. “But the real victory will come when supply meets demand.”
Why it matters
- According to a recent Abacus Data report, 88% of Canadians are worried about housing affordability, with 89% believing homeownership is becoming increasingly out of reach. More importantly, 74% of young families with children that do not own a home, have expressed a strong desire to eventually become homeowners one day.
- The Canadian Real Estate Association (CREA) has long advocated for this rebate as part of its broader push to close the housing supply gap.
Rebate highlights
- Full rebate: 100% of the GST (or the federal portion of HST) on new homes priced up to $1 million (up to $50,000 in savings).
- Partial rebate: Applies to homes priced between $1 million and $1.5 million.
Homes priced at $1.5 million or more are ineligible.
Who’s eligible?
- Buyers must qualify for the existing GST/HST New Housing Rebate.
- Purchase agreements must be signed between May 27, 2025, and 2031, with ownership transferred by 2036.
- The home must be newly built or substantially renovated, with construction starting before 2031 and completed by 2036.
- For owner-built homes, construction must begin on or after May 27, 2025, and occupancy must occur before 2036.
- At least one buyer must be a first-time homebuyer and the first occupant of the home.
A full list of eligibility requirements is available via the Government of Canada.
CREA’s position regarding Bill C-4
We encourage and anticipate the swift passage of the GST/HST rebate for first-time home buyers embedded in Bill C-4 during the fall session of Parliament.
If the FTHB GST/HST rebate does not help to significantly turn around new housing starts, the federal government should consider extending the FTHB GST rebate to all owner-occupiers who purchase a newly built primary residence (i.e. seniors looking to downsize) and sell their existing home to another owner-occupier. Extending the rebate to any purchaser of a newly built home in this manner would temporarily reduce the cost of new homes by up to 5%, encourage new construction, and free up existing housing stock for families.
Important information about accessing these funds
Before Royal Assent: If ownership is transferred to an individual before the proposed legislation receives Royal Assent, the builder may only credit the existing GST/HST new housing rebate, and the individual would need to apply separately to the Canadian Revenue Agency (CRA) for the FTHB GST/HST rebate, if Royal Assent is received.
After Royal Assent: If the proposed legislation receives Royal Assent and ownership is subsequently transferred to an individual, builders would be able to credit the FTHB GST/HST rebate to the purchaser in the same manner as the existing GST/HST new housing rebate. This means builders would credit the rebate amount to the purchaser, against the total amount payable for the house. The purchaser would not have to apply to the CRA directly or wait to receive their rebate.
The article above is for information purposes and is not legal advice or a substitute for legal counsel.
