On May 27, 2025, Canada's newly elected federal government tabled legislative proposals to amend the Excise Tax Act and introduce a First‑Time Home Buyer (FTHB) GST Rebate. Under the proposed changes:

Full 5% rebate of GST on eligible new homes priced up to CA$1 million
Phase‑out of the rebate for homes priced between CA$1 million and CA$1.5 million
No rebate for homes over CA$1.5 million

Below, we outline the key features of the proposed rebate, who qualifies, important timing rules—and what buyers and developers need to watch for.

Who Is Eligible?

To qualify as a First‑Time Buyer, you must:

Be at least 18 years old
Be a Canadian citizen or permanent resident
Acquire the property for use as your primary place of residence
Be the first occupant of the property after construction or substantial renovation
Not have occupied, as your primary residence (whether in Canada or abroad) any residential unit you (or your spouse/common‑law partner) owned or held an interest in during the current or previous four calendar years

Note: Both you and your spouse/common‑law partner must meet the "first occupant" test. If either party fails, no rebate is available.

What Properties Qualify?

The FTHB GST Rebate applies to a "Qualifying Home," which is:

A single‑unit residential complex (detached, semi‑detached)
A residential condominium unit
A share of the capital stock of a cooperative housing corporation (giving the right to occupy a unit)

In each case, the home must be:

Purchased from a builder
Built (by you or a contractor) on land you own or lease
Acquired as shares from a housing cooperative

How Much Is the Rebate?

100% of the 5% GST (up to CA$50,000) on homes ≤ CA$1 million
Linear phase‑out for homes priced CA$1 million–CA$1.5 million
No rebate for homes > CA$1.5 million

Timing Requirements

Homes Purchased from a Builder

Agreement date: May 27, 2025 – Dec 31, 2030
Construction begins: before Jan 1, 2031
Substantial completion & transfer: before Jan 1, 2036

Owner‑Built or Contractor‑Built Homes

Construction agreement date: May 27, 2025 – Dec 31, 2030
Start & substantial completion: before Jan 1, 2031 / before Jan 1, 2036
Possession transfer: before Jan 1, 2036

Cooperative Housing Shares

Share purchase agreement: May 27, 2025 – Dec 31, 2030
Construction/renovation timeline: as above
Share transfer: before Jan 1, 2036

Key Limitations

One‑time only: Each individual may claim the rebate once in their lifetime
Spousal restriction: No rebate if your spouse/common‑law partner has already claimed it
Assignment sales: Ineligible if the original agreement predates May 27, 2025
Contract variations: Agreements entered before May 27, 2025—even if varied later—are deemed ineligible

Key Takeaways for Buyers & Builders

The FTHB GST Rebate largely mirrors the existing 36% GST/HST New Housing Rebate, but is targeted solely at first‑time buyers
Builders who agree to assign rebates must perform due diligence on buyer eligibility to avoid financial risk
In many provinces (including Ontario), the federal rebate can be stacked with provincial land transfer tax credits
Québec and other participating provinces have yet to confirm whether they will mirror these GST relief measures for provincial sales taxes

Final Thoughts

On June 5, 2025, the federal government introduced Bill C‑4, which, if enacted, will bring these proposals into force retroactively as of May 27, 2025. While the legislation is not yet law, prospective home buyers and developers should:

Review purchase and construction agreements for eligibility compliance
Plan timelines carefully to ensure rebate qualification
Consult tax and legal advisors early to maximize benefits and manage risk

GST Relief for First‑Time Home Buyers: What You Need to Know