New GST Rebate for First-Time Buyers: What Builders & Developers Need to Know!
On May 27, 2025, the federal government rolled out a major incentive aimed at boosting homeownership and stimulating the new housing market: a GST rebate for first-time home buyers (FTHBs) on new homes valued up to $1.5 million. This program is a game-changer for first time home buyers and those in the building and development sector.
DETAILS OF THE NEW REBATE
The new GST rebate allows eligible first-time home buyers to recoup up to 100% of the 5% GST on qualifying homes:
This means savings of up to $50,000, making new construction far more appealing to first time buyers navigating today’s affordability challenges.
- Up to 100% GST rebate on new homes priced up to $1 million.
- Partial rebate (e.g., up to 50%) on homes between $1 million and $1.5 million.
- No rebate on homes over $1.5 million.
KEY ELIGIBILITY CRITERIA
For homebuyers to qualify, at least one purchaser must:
- Be 18 or older
- Be a Canadian citizen or permanent resident
- Not have owned a home (or lived in one owned by a spouse/partner) in the past four calendar years
- Intend to live in the property as their primary residence
KEY DATES TO KNOW
- Contracts must be signed between May 27, 2025, and 2031
- Construction must be substantially complete by 2036
- Applies to new homes from builders, owner-built homes, and eligible co-op shares
Important: Homes under contracts signed before May 27, 2025—including assignments—are not eligible. The rebate is also a once-per-lifetime benefit for eligible buyers.
WHY THIS MATTERS FOR BUILDERS & DEVELOPERS
This program is poised to drive increased demand in the $750K–$1.5M range, where affordability pressures have sidelined many would-be buyers. With the rebate now reducing the upfront tax burden, more first time home buyers may re-enter the market, particularly in inner-city and surrounding communities where pricing has been out of reach.
Key implications for industry professionals:
- Boost pre-sale interest by promoting the rebate in your marketing to increase engagement and move inventory
- Rethink product positioning: Homes priced just under or around the $1M threshold could see a surge in demand
FINAL THOUGHTS
This federal rebate isn’t just a win for first-time home buyers—it’s a strategic opportunity for builders and developers to capture renewed market interest and drive sales. However, to truly maximize the impact, its essential to align your project marketing, pricing strategy, and buyer outreach with professionals who thoroughly understand the program.
Partnering with an experienced real estate team can help you:
- Target qualified first-time buyers effectively
- Craft compelling sales messaging around rebate eligibility and savings
- Navigate timelines and paperwork to ensure deals meet rebate criteria
Need help navigating the rebate? We're here to help!
Let’s work together to turn this rebate into results. Let’s connect and make the most of this new incentive together!
Sources:
Read the full announcement from the Government of Canada here.