New GST Rebate Could Save First-Time Buyers Up to $50,000 on a New Home
With affordability still top of mind for many Canadians trying to break into the housing market, the federal government has introduced new legislation that may offer a big break for first-time homebuyers.

On May 27, 2025, a proposal was tabled to eliminate the 5% GST on new home purchases for eligible buyers, providing much-needed relief in a market where even modest new builds often come with seven-figure price tags.

🏠 Here’s what you need to know about this new initiative and how it could impact you.

What’s Changing?

The federal government’s proposal would remove the Goods and Services Tax (GST) on newly built homes up to $1 million for first-time homebuyers. That means a full 5% rebate, which could equal up to $50,000 in savings — a significant amount, especially for those buying at the upper end of the rebate limit.

For new homes priced between $1 million and $1.5 million, a phased rebate will apply. For instance:

A $1.25 million home could be eligible for a 50% GST rebate, saving buyers around $25,000.

The higher the home price (up to $1.5 million), the smaller the rebate becomes.

The goal? Help younger Canadians and first-time buyers get a foothold in a housing market that has become increasingly difficult to enter.

Who’s Eligible?

To qualify for the rebate:

You must be a Canadian citizen or permanent resident.

Be at least 18 years old.

Not have owned a home (in Canada or elsewhere) in the current calendar year or the four previous years.

The new home must be your primary residence.

Eligible properties include newly built homes from a builder, homes built on land you own or lease, or co-operative housing shares.

📝 Note: You’ll need to submit documentation to support your claim when filing your taxes. The Canada Revenue Agency (CRA) may take up to six months to process the rebate — and there is always the possibility of audit if anything appears unclear.

Does This Actually Help?

Whether or not this move makes housing more affordable is still up for debate. Prices aren’t likely to fall because of the rebate, but for first-time buyers who are already saving for a large down payment, a $25,000–$50,000 tax break could make a real difference.

And while it may not be a “make-or-break” moment for every buyer, any measure that supports homeownership for young Canadians is a step in the right direction.

As Ian Calvert, VP at HighView Financial Group, put it in a recent Toronto Star interview by reporter Clarrie Feinstein, “It’s targeting a small group of people, but it’s helping those who need it the most.”

Final Thoughts

If you’re a first-time buyer exploring new construction in Vaughan, the GTA, or surrounding areas — this could be an excellent time to take another look. Whether you’re planning to buy from a builder or design your own dream home, the new GST rebate could help bring your budget a little closer to your vision.

📩 Have questions about how this might apply to your situation? I’d be happy to connect you with trusted tax professionals or walk you through the homebuying process from a real estate perspective.

Let’s make homeownership a little more possible — one smart step at a time.