First Time Home Buyer GST Rebate 2025
GST Rebate for First-Time Home Buyers
The federal government has announced a new Goods and Services Tax (GST) rebate aimed at helping first-time buyers get into newly built homes or co-operative housing. While the legislation is still pending, the proposal outlines meaningful financial relief for qualified buyers and could reshape affordability in the new construction space.
What’s Being Proposed?
Effective for purchase contracts dated May 27, 2025 or later, the proposal would amend the federal Excise Tax Act to offer the following:
- A full GST rebate on new homes priced under $1,000,000
- A partial rebate for homes priced between $1,000,000 and $1,500,000
- No rebate on homes over $1.5M
The partial rebate phases out linearly—a purchase at $1.25 million would be eligible for a 50% rebate, and a $1.4 million purchase would receive a 20% rebate.
It’s important to note that the GST must still be paid at the time of closing, and the rebate would be claimed afterward. As of now, this is a proposed measure—final legislation has not yet passed, and specific definitions and eligibility criteria are still being finalized.
Who Qualifies and How?
At this stage, eligibility is focused on first-time home buyers purchasing newly built homes or co-ops, with the contract signed on or after the announcement date.
While final definitions are pending, most government programs define a first-time home buyer as someone who has never owned a home, or hasn’t owned one within a set period—often four years.
Buyers exploring strategies such as staggered ownership (e.g. 99% / 1% tenants-in-common structures) or adding a first-time buyer to title prior to closing should proceed cautiously. These approaches may be viable under the new rules, but tax and legal advice will be essential to ensure compliance and avoid costly mistakes.
Key Points to Know
- The rebate only applies to contracts signed on or after May 27, 2025. Earlier contracts are not eligible, even if completion happens later.
- A first-time buyer is likely to be someone who has never owned a home or hasn’t owned in several years, but the formal definition is still pending.
- Homes priced between $1M and $1.5M are eligible for a scaled rebate—for example:
- $1.25M = 50% rebate ($25,000)
- $1.4M = 20% rebate ($10,000)
- Buyers must still pay GST at closing, and then apply for the rebate.
- Rewriting or restructuring a contract to meet the eligibility date may be possible but requires the cooperation of the seller or builder and legal review.
- Adding a FTHB family member to title may not qualify if the contract was signed before May 27, 2025 or if the new buyer is not reflected in the original agreement.
- Ownership strategies (e.g. 99%/1%) may be beneficial in cases where one buyer qualifies, but must be implemented with sound legal and tax advice.
- Properties resold within a year of completion may or may not qualify, depending on whether they meet the Excise Tax Act definition of “new.”
- Only one party may claim the rebate—double claims are not allowed.
- The rebate is distinct from the BC Property Transfer Tax exemption, and the two programs operate independently.
- A significant gap in ownership (e.g. 4+ years since owning) might still allow a buyer to qualify, but final rules will determine this.
Final Thoughts
This proposed GST rebate could offer meaningful support to first-time buyers of new construction—but it’s not automatic. Because the program is still awaiting formal legislation, buyers and brokers alike should proceed with caution and make sure they fully understand the requirements.
As always, professional guidance matters. Please speak to your favourite real estate lawyer for clarification.
