A Breath of Fresh Air for First-Time Buyers: Ottawa Will Eliminate GST on New Homes!
A Breath of Fresh Air for First-Time Buyers: Ottawa Will Eliminate GST on New Homes!

Great news for those dreaming of their first new home! The federal government has just tabled legislative proposals that could make future homeowners smile. Please note, however: these measures are not yet in effect - they are currently proposals awaiting adoption by Parliament.

The Big Proposed Change: Goodbye GST for First-Time Buyers

On May 27, 2025, the Department of Finance published legislative proposals to create a new temporary GST rebate. If these proposals are adopted, first-time home buyers could say goodbye to GST (5%) on their new home, provided it's worth less than one million dollars. And for those aiming higher? The rebate would gradually decrease for properties between 1 and 1.5 million dollars.

Concretely, this would represent savings of up to $50,000 on the purchase of a new home - enough to make a real difference in the budget!

Who Could Benefit and How?

To be eligible for the future rebate, you would need to be a genuine first-time home buyer and meet criteria similar to the current GST/HST rebate for new homes. The measure would apply if you:

  • Purchase a new home from a builder with a contract concluded after May 26, 2025 and before 2031

  • Build your own home (or hire professionals) on land you own or lease, with construction beginning before 2031

  • Purchase shares in a housing cooperative

Current Rebates Remain in Place

Rest assured, existing rebates wouldn't disappear! For those who aren't first-time buyers, current credits would remain, even though many transactions now exceed current thresholds due to rising prices.

Legislative Status: Awaiting Adoption

It's crucial to understand that these measures are not yet in effect. The government has tabled a notice of ways and means motion in Parliament, but the bill still needs to be adopted. The Canada Revenue Agency has not yet provided details on how it intends to administer these rules.

To Watch: Will the Provinces Follow Suit?

One question remains: would provinces that apply HST offer a similar rebate for their provincial portion? For now, only the federal portion is targeted by these proposals.

This proposed temporary measure, which would extend until 2031 for contracts and 2036 for construction completion, would mark an important turning point in government assistance for homeownership - if adopted! In the meantime, future buyers will have to wait to see if these election promises materialize into law.

 

Read our article about New Homes Sales Taxes