There’s good news for first-time homebuyers! On May 27th, 2025, the federal government introduced legislation to provide a 100% rebate on the 5% GST (federal portion of HST) for first-time buyers of new or substantially renovated homes up to $1 million – potentially saving up to $50,000.
This rebate is gradually reduced for home values above $1 million to a max of 1.5 million, with no rebate offered on properties exceeding the $1.5 million threshold.
Key details of the First-Time Home Buyer (FTHB) GST rebate
The rebate is eligible to first-time buyers purchasing a new build from a builder or on owner-built homes.
New homes purchased from a builder
· Buyers can recover up to $50,000 of the 5% GST (or federal portion of HST), even if the home is on leased land
· At least one purchaser must be a first-time homebuyer using the home as their primary residence
· The qualifying buyer must also be the first person to occupy the home
· Eligible if: The Agreement of Purchase and Sale is signed on or after May 27th, 2025 and before 2031; and Construction begins before 2031 and the home is substantially completed before 2036
Owner-built homes
· Owner-builders can recover up to $50,000 of the GST or federal HST paid during construction
· At least one owner must be a first-time homebuyer who is: Building the home themselves; or Hiring someone else to build on their behalf
· The qualifying individual must be the first to occupy the home as their primary residence
· Eligible if: Construction begins on or after May 27th, 2025 and before 2031; and The home is substantially completed before 2036
What this means for mortgage planning
There are multiple mortgage-related benefits for first-time homebuyers of new builds or substantially renovated properties, including:
· Lower upfront costs: Less cash needed at closing, reducing stress on down payment and mortgage needs
· Better qualification: Reduced purchase price could improve debt-to-income ratios, aiding approvals
· Flexible budgeting: Savings can be redirected to upgrades, furnishings or accelerating mortgage payments
Have questions about building your first home? Answers are a call or email away!