First-Time Home Buyers GST Rebate: What New Build Buyers Need to Know
For first-time home buyers, purchasing a newly built home from a builder may now come with a major advantage: the First-Time Home Buyers’ GST Rebate.
March 16, 2026
This federal rebate is designed to help make homeownership more affordable by returning some or all of the GST paid on a qualifying new home purchase on new contracts dated March 20, 2025 and before 2031. If you are buying your first home directly from a builder, this program may provide significant savings — including the potential for a full GST rebate on homes priced up to $1,000,000. Note, this program does not apply to resale, giving a new home purchase a unique advantage.
Here’s what first-time buyers should know.
What Is the First-Time Home Buyers GST Rebate?
The First-Time Home Buyers GST Rebate is a federal program that may allow eligible buyers to recover some or all of the GST paid when purchasing a new home from a builder.
For qualifying purchases:
- Homes priced at $1,000,000 or less may be eligible for a 100% GST rebate
- Homes priced above $1,000,000 and below $1,500,000 may qualify for a partial rebate
- Homes priced at $1,500,000 or more are not eligible
- This applies to both homes to build and move in ready home options
Who Qualifies as a First-Time Home Buyer?
This rebate is intended for first-time home buyers who purchase a qualifying new home and meet the Canada Revenue Agency eligibility requirements.
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Must be 18 years or older
- Home will be primary residence
- You have not lived in a home that you or your spouse or common-law partner owned, or jointly owned, whether in or outside of Canada, as your primary place of residence at any time in the calendar year or in the previous four calendar years
- Are a Canadian citizen or permanent resident
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Have not claimed the FTHB Rebate previously
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Construction of the home begins before 2031 and the home is substantially completed before 2036
For buyers purchasing a new home from a builder, this can represent substantial savings and create a more accessible path into homeownership.
How the Rebate Works
Homes Priced at $1,000,000 or Less
If the purchase price of the new home is $1,000,000 or less, the rebate may cover 100% of the GST paid.
Since GST is 5%, that means:
- A home purchased for $800,000 could result in $40,000 in GST savings
- A home purchased for $950,000 could result in $47,500 in GST savings
- A home purchased for $1,000,000 could result in $50,000 in GST savings
Homes Priced Above $1,000,000 and Below $1,500,000
For homes priced over $1,000,000 but under $1,500,000, the rebate is gradually reduced.
That means:
- At $1,000,000, the buyer may receive the full rebate
- At $1,500,000, the rebate is reduced to $0
- Between those values, the rebate decreases proportionally as the purchase price increases
How the Calculation Works Above $1,000,000
For homes purchased from a builder at a price between $1,000,000 and $1,500,000, the rebate is calculated using a phase-out formula.
Step 1: Calculate the full GST amount
GST is 5% of the purchase price.
Step 2: Apply the phase-out factor
The rebate is reduced based on how far the purchase price is above $1,000,000 within the $500,000 phase-out range.
A simple way to express the rebate is:
Rebate = 5% × Purchase Price × [(1,500,000 − Purchase Price) ÷ 500,000]
Example 1: Home Price of $1,100,000
- GST =Â $55,000
- Phase-out factor = (1,500,000 − 1,100,000) ÷ 500,000 = 0.8
- Estimated rebate = $55,000 × 0.8 = $44,000
Example 2: Home Price of $1,400,000
- GST =Â $70,000
- Phase-out factor = (1,500,000 − 1,400,000) ÷ 500,000 = 0.2
- Estimated rebate = $70,000 × 0.2 = $14,000
These examples show that buyers above the $1,000,000 threshold may still receive meaningful savings, even though the rebate is reduced as the purchase price rises.
As with any government rebate program, eligibility requirements and technical conditions apply. Buyers should review the official CRA First Time Home Buyer’s GST/HST Rebate guidelines carefully and confirm how the rules apply to their specific transaction.
Why This Matters for First-Time Buyers
For buyers entering the market, closing costs and purchase-related expenses can add up quickly. A rebate on GST can meaningfully reduce the total cost of purchasing a newly built home from a builder.
This is an incredible opportunity for first-time buyers to take the next step with:
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Greater savings on new homes vs resale homes
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Increased affordability + built in value
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Greater purchasing flexibility
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Extra room in your budget
For qualifying first-time buyers, this rebate can be a valuable part of the overall affordability picture.
Next Steps
If you’re considering a newly built home, understanding how this rebate works can help you better evaluate your total purchase cost and the savings that may be available to you. Connect with our team to get started on your first new home!
More Programs For First-Time Home Buyers:Â
- The Home Buyers Amount (HBTC):Â A federal non-refundable tax credit in Canada that allows first-time homebuyers to claim up to $10,000 on their tax return, resulting in a $1,500 tax reduction (calculated at a 15% rate)
- First Home Savings Account (FHSA):Â A registered plan combining RRSP and TFSA benefits. Contributions are tax-deductible, and withdrawals for a first home are tax-free.
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Home Buyers’ Plan (HBP): Allows first-time buyers to withdraw up to $60,000 tax-free ($120,000 per couple) from their RRSPs to buy or build a qualifying home. Funds must be repaid within 15 years, with repayment starting by the second year after withdrawal
