CRA warns first-time home buyers: Miss these rules and you could lose up to $50,000 in GST savings

For new homes valued up to $1 million, the rebate covers 100% of the GST paid, up to a maximum of $50,000. For homes valued between $1 million and $1.5 million, the rebate is gradually reduced on a sliding scale. There is no rebate for homes valued at $1.5 million or more (1).

This is a dramatic improvement over the old GST New Housing Rebate, which capped savings at approximately $6,300 — a number rendered largely irrelevant by today's home prices.

For agreements of purchase and sale entered into on or after March 20, 2025, and before 2031, eligible first-time buyers purchasing new homes under $1 million will pay no GST. For homes priced between $1 million and $1.5 million, a partial rebate applies on a sliding scale, up to a maximum of $50,000. No rebate is available on homes above $1.5 million. This relief does not apply to resale properties or those buyers already in the housing market.

How much home can you afford?

Whether you're hunting for a new home or looking to refinance your mortgage, knowing how much your new loan might cost you is critical. Use our handy mortgage calculator to help you understand what your payments could look like.

Get Started

Ontario buyers can expect even more — but it's not law yet

If you are buying a new build in Ontario, the provincial government has announced its intention to also rebate the full 8% provincial portion of the HST on homes up to $1 million, with a phase-out between $1 million and $1.5 million (2). If implemented, eligible Ontario buyers could qualify for a rebate up to $130,000 — combined federal and provincial savings.

However, the Ontario government has not yet passed enabling legislation for its provincial rebate. As such, buyers in Ontario should not plan their finances around the provincial $80,000 component until that legislation receives Royal Assent.

If you’re in the market, be sure to monitor provincial announcements closely before signing.

The date that determines everything

The single most consequential detail in this rebate is a date: March 20, 2025.

When Bill C-4 was first introduced into Parliament on May 27, 2025, the eligibility window was set to begin on that date — leaving buyers who had signed purchase agreements between the March 20, 2025 announcement and May 26, 2025 in a costly grey zone. That unfairness was corrected. During Parliamentary committee review in late 2025, the effective date was amended and backdated to March 20, 2025 — the date the rebate was first announced by the federal government.

That means, the FTHB GST Rebate is available for agreements of purchase and sale entered into on or after March 20, 2025, and before January 1, 2031. If you signed after the government's original announcement and before the bill was introduced into Parliament, you are eligible.

Agreements signed before March 20, 2025 do not qualify.

And the protection against workarounds is strict. If a pre-March 20, 2025 agreement is cancelled and a new one signed in an attempt to qualify, the CRA may disallow the rebate. The same applies to assignments: if the original purchase agreement predates March 20, 2025, an assignment of that contract does not unlock eligibility.

Who actually qualifies — and who doesn't

To qualify for the FTHB GST Rebate, you must:

• Be at least 18 years of age
• Be a Canadian citizen or permanent resident
• Not have lived in a home you or your spouse or common-law partner owned as a primary residence in the calendar year of purchase or in any of the previous four calendar years
• Be purchasing a newly constructed or substantially renovated home as your primary residence, where you will be the first occupant
• Have not previously claimed this rebate in your lifetime

It is the four-year look back that catches many people off guard. As an example: A buyer who sold their home in 2022, rented for three years, and purchased a new build in early 2026 would not qualify — because 2022 still falls within the four-year look back window.

Your spouse or common-law partner's ownership history also counts. If your partner owned a principal residence within those four years, your eligibility may be affected even if you personally have never owned property.

What happens if you closed before the law passed?

If you signed your purchase agreement on or after March 20, 2025, but took possession before Royal Assent was granted on March 12, 2026, you can still claim the rebate — but it requires an extra step.

Because the legislation was not yet in force at the time of your closing, your builder could not have credited the rebate on your statement of adjustments. You will need to pay — or have already paid — the full GST or HST to the builder, then apply directly to the CRA to receive your rebate retroactively. CRA forms for the enhanced rebate are being finalized now; watch for updated guidance on the CRA website and in Publication RC4028.