Canada Just Cut the GST for First-Time Homebuyers—Here's What That Means for You

Buying your first home is already expensive. Now the federal government is taking one big cost off your plate.

As of March 12, 2026, first-time homebuyers in Canada can officially get a GST rebate on new homes worth up to $1.5 million. That's up to $50,000 back in your pocket, just for being a first-time buyer.

Already bought? This new law is retroactive and applies to any home sale entered on or after March 20th, 2025.

Here's what you need to know: what the First-Time Homebuyer GST rebate is, how it works, and who can apply.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

What Is the GST Rebate, Exactly?

When you buy a brand-new home, you pay GST (Goods and Services Tax) on the purchase price. That's 5% on top of an already big number.

For a $700,000 new home? That's $35,000 in GST. For a $900,000 home? You're looking at $45,000. That's real money that could go toward your down payment, furniture, or just breathing room in your new home.

The new First-Time Home Buyers' GST Rebate (FTHB GST Rebate) gives that money back to qualifying buyers.

On homes under $1 million, you get 100% of the GST back.

On homes between $1 million and $1.5 million, you get a partial rebate that shrinks as the price rises.

No rebate applies to homes priced at $1.5 million or above.

How Much Can You Actually Save? Real Examples

Example 1: $650,000 new townhouse

• GST owing = $32,500
• Rebate = 100% back; up to $50,000
• You save: $32,500

Example 2: $950,000 new condo

• GST owing = $47,500
• Rebate = 100% back; up to $50,000
• You save: $47,500

Example 3: $1,250,000 new home

• This falls in the "partial rebate" zone—halfway between $1 million and $1.5 million
• GST owing = $62,500
• Rebate = 50% of max rebate; up to $25,000
• You save: $25,000

Example 4: $1,600,000 new home

• GST owing = $80,000
• No rebate available at this price
• You save: $0

How Is the FTHB GST Rebate Calculated?

Under $1 million is easy; you get back 100% of the GST amount.

Here’s how to calculate the rebate amount if you’re between $1 million and $1.5 million:

The rebate is reduced on a “straight line” basis. That means the reduction is directly proportional to the amount over $1 million.

Therefore, the $500,000 between $1 million and $1.5 million is a sliding scale between 100% of the rebate and 0% of the rebate. The closer you get to $1.5 million, the less rebate you get.

The equation looks like this:

Adjusted Rebate Amount = ([$1,500,000 - Purchase Price] / $500,000) x (Max Rebate Amount)

$1,500,000 - Purchase Price tells us how much room we have left on the $500,000 scale.

Dividing that by $500,000 tells us what percentage that amount is of $500,000.

Then we multiply the maximum rebate, $50,000, by that percent.

Let’s test this out. How much would we get back on a $1.1 million house?

• ([$1,500,000 - $1,100,000] / $500,000) x $50,000
• ($400,000 / $500,000) x $50,000
• (0.8) x $50,000

The adjusted rebate amount is 80% of $50,000, or $40,000.

Who Qualifies?

To get this rebate, you need to check a few boxes.

You must be a first-time buyer. That means you haven't owned a home—or condo, or anything else that qualifies as a residence—anywhere in the world in the current calendar year or the four years before it.

Example: if you’re buying in 2026, the last possible year you can have owned a home and still qualify is 2021.

This also applies to your spouse or common-law partner. If they owned a home that you lived in during that window, you don’t qualify.

However, only one of you has to be a first-time homebuyer. If they owned a home, but you didn’t live in it, you could still qualify when you purchase together.

You must be at least 18 years old and either a Canadian citizen or a permanent resident.

The home must be a newly built home. It can be from a builder, or it can be a home you built yourself (or hired someone to build) on land you own or lease.

Alternatively, you can get the rebate if you buy shares in a new co-operative housing corporation (co-op).

It does not apply to resale homes, even if they were built recently. You need to be the first person to ever live in the home.

You must live there. The home needs to be your primary residence. You can't flip it or rent it out from day one and still claim the rebate.

What Types of Homes Count?

Three situations qualify:

1. Buying a new home from a builder. This is the most common situation. You sign a purchase agreement with a builder and buy a brand-new house, condo, or townhouse. The agreement must be signed on or after March 20, 2025, and before 2031. Construction needs to start before 2031 and wrap up before 2036.

2. Building your own home. If you own (or lease) land and hire a contractor to build a home on it, you can claim the GST back on what you paid to build. Same timeline applies—construction starts on or after March 20, 2025, and before 2031, finished before 2036.

3. Buying into a co-op. If you're purchasing a share of a co-operative housing corporation, you may be eligible too. Same purchase and build timeline rules apply.

Can You Claim This More Than Once?

No. This is a one-time lifetime rebate. Once you've claimed it, that's it.

Your spouse or common-law partner claiming it in the past also disqualifies you—even if you personally never have.

A Few Things to Watch Out For

Assignment sales have limits. If you're buying a home through an assignment (taking over someone else's purchase contract), the rebate won't apply if that original contract was signed before March 20, 2025.

Cancelled and re-signed agreements are flagged. The government has rules to prevent people from cancelling pre-March 20 contracts and re-signing them just to qualify. If that's the situation, the rebate may be disallowed.

Co-op units used for rental purposes don't qualify. If the co-op housing is eligible for the 100% GST rebate for purpose-built rentals, the first-time buyer rebate doesn't apply to that unit.

When Does This Take Effect?

The rebate applies to purchase agreements signed on or after March 20, 2025. If you signed before that date, you don't qualify.

The program runs until at least 2031 for new agreements, with a construction completion deadline of 2036.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

Bottom Line on the New Rebate

If you're a first-time buyer shopping for a new-build home in Canada, this rebate is worth factoring into your budget. On a $900,000 home, getting $45,000 back changes the math significantly. That could mean a lower mortgage, a bigger emergency fund, or finally having enough to stop renting.

Talk to your agent and a mortgage professional about how this fits into your specific situation—especially if you're eyeing a home in that $1 million to $1.5 million range where the partial rebate applies. And don’t forget: you can claim other homeowner tax deductions, too!

If you're interested in Calgary real estate, contact Justin Havre Real Estate Team with eXp Realty with Calgary Homes at (403) 217-0003 to get in touch with a local real estate agent who can help you find your Calgary dream home today.