First-time home buyer GST rebate Canada 2026: save up to $50,000 on a new home
Canada's new GST rebate eliminates up to $50,000 in tax on new homes for first-time buyers. Who qualifies, which homes are eligible, and how to stack it with Ontario's HST removal and the FHSA.
On March 12, 2026, the Canadian government made history by eliminating GST on new homes for first-time buyers — the largest federal home buyer incentive in Canadian history. Under Bill C-4, the Making Life More Affordable for Canadians Act, eligible first-time buyers can now save up to $50,000 in GST on a new home purchase. Combined with Ontario's simultaneous HST removal on new homes and the existing First Home Savings Account (FHSA), a first-time buyer in Ontario could save over $80,000 in combined government incentives on a single purchase. This guide explains exactly who qualifies, which homes are eligible, how much you save, and how to claim the rebate.
What is the First-Time Home Buyers' GST Rebate?
The First-Time Home Buyers' GST Rebate is a federal program that eliminates the 5% Goods and Services Tax (GST) on new home purchases for eligible first-time buyers. It became law on March 12, 2026 when Bill C-4 received Royal Assent.
Key facts:
- Maximum GST saving: $50,000 (on a $1,000,000 home at 5% GST)
- Home price range: Full rebate up to $1,000,000 — sliding scale to $1,500,000
- No rebate above $1,500,000
- Eligible agreements: March 20, 2025 to December 31, 2030
- Who qualifies: First-time home buyers only
- Property type: New construction only (not resale)
How much can you save? — the rebate amounts
The GST rebate amount depends on your purchase price:
| Purchase Price | GST Without Rebate | GST With Rebate | Your Saving |
|---|---|---|---|
| $500,000 | $25,000 | $0 | $25,000 |
| $600,000 | $30,000 | $0 | $30,000 |
| $700,000 | $35,000 | $0 | $35,000 |
| $800,000 | $40,000 | $0 | $40,000 |
| $900,000 | $45,000 | $0 | $45,000 |
| $1,000,000 | $50,000 | $0 | $50,000 |
| $1,200,000 | $60,000 | $30,000 | $30,000 |
| $1,500,000 | $75,000 | $75,000 | $0 |
How the sliding scale works:
- Homes priced $1,000,000 or under: full 100% GST rebate — you pay $0 GST
- Homes priced $1,000,001 to $1,499,999: partial rebate that phases out proportionally
- Homes priced $1,500,000 and above: no rebate — full GST applies
Who qualifies for the GST rebate?
First-time buyer definition
You qualify as a first-time home buyer for this program if you have not owned a home that you lived in as your principal residence at any time during the current calendar year or the previous four calendar years.
Important: If you are purchasing with a partner or spouse:
- If BOTH are first-time buyers: full rebate applies
- If ONE has previously owned: you may not qualify for the full rebate
- Each buyer's status is assessed individually — confirm with your builder and a tax professional
Canadian residency requirement
You must be a Canadian citizen or permanent resident to qualify. Non-residents and foreign buyers do not qualify for the rebate.
Principal residence requirement
The home must be purchased as your primary place of residence. Investment properties and cottages do not qualify. If you purchase claiming the rebate as a principal residence and then rent it out, you may be required to repay the rebate.
Which homes are eligible?
New construction only
The GST rebate applies to newly constructed homes only — including:
- Pre-construction condos and townhouses
- Newly built detached houses and semi-detached homes
- Substantially renovated homes (renovated to the point of being essentially new)
- Homes built on your own land (owner-built homes)
Resale homes do NOT qualify
Existing resale homes are NOT subject to GST and therefore do not qualify for this rebate. The rebate is specifically designed to encourage new home construction and only applies to new builds.
Agreement date requirement
Your purchase agreement must have been signed between March 20, 2025 and December 31, 2030 to be eligible. Agreements signed before March 20, 2025 do not qualify even if the closing occurs after March 12, 2026.
Ontario's HST removal — a massive additional saving for Ontario buyers
Ontario announced an additional temporary measure in March 2026 — the full removal of the provincial portion of HST (8%) on new homes for agreements signed between April 1, 2026 and March 31, 2027.
How Ontario's HST removal works:
- Provincial HST (8%) is fully removed on new homes up to $1,000,000
- Partial removal applies from $1,000,001 to $1,850,000
- Maximum provincial saving: $80,000 on a $1,000,000 home
Combined federal + provincial saving for Ontario first-time buyers:
| Purchase Price | Federal GST Saving | Ontario HST Saving | Total Saving |
|---|---|---|---|
| $500,000 | $25,000 | $40,000 | $65,000 |
| $700,000 | $35,000 | $56,000 | $91,000 |
| $1,000,000 | $50,000 | $80,000 | $130,000 |
Note: Ontario HST removal is temporary (April 1, 2026 — March 31, 2027) and applies to all buyers, not just first-time buyers. The federal GST rebate is permanent (to December 31, 2030) but applies to first-time buyers only.
How to stack multiple programs for maximum savings
A first-time buyer in Ontario purchasing a new $800,000 condo in 2026 could access all of the following:
- Federal GST rebate: $40,000 saving
- Ontario HST removal: $64,000 saving
- FHSA withdrawal (per person): $40,000 tax-free + $8,000-$16,000 in tax refunds
- RRSP Home Buyers Plan: $60,000 per couple
- Ontario LTT first-time buyer rebate: up to $4,000
- First-Time Home Buyers' Tax Credit: $1,500 federal credit
Total government assistance available to a qualifying couple: over $200,000 in combined savings, rebates, and tax-advantaged funds. This represents an unprecedented level of government support for first-time buyers in Canadian history. See our first-time home buyer incentives guide for the full picture.
How to claim the GST rebate
Through the builder (most common)
In most cases the builder credits the GST rebate directly — the purchase price you pay is already net of GST if you qualify. This means you never actually see the GST charged and rebated — it simply is not included in your purchase price.
What to do: Confirm with your builder at the time of signing whether the listed price includes or excludes GST. If the price excludes GST and you qualify for the rebate, confirm the builder will assign the rebate to themselves and credit you.
Directly from the CRA
In some cases you may pay GST at closing and then claim the rebate directly from the Canada Revenue Agency. Your real estate lawyer handles this at closing.
What you need: Proof of first-time buyer status, proof of principal residence intent, your purchase agreement, and closing documents.
Important: Have a real estate lawyer review your purchase agreement specifically for GST/HST treatment before signing.
The impact on mortgage qualification
The GST rebate does not directly affect your mortgage qualification — however it significantly reduces your required closing funds which can make a real difference for budget-constrained buyers. See our minimum down payment guide for how the math flows through.
Example — without rebate:
- $700,000 new condo purchase price
- Plus GST (5%): $35,000
- Total cost: $735,000
- Down payment (5% of $735,000 after CMHC): $36,750
- Plus closing costs: $25,000
- Total cash needed: $61,750
Example — with GST rebate:
- $700,000 new condo purchase price
- GST: $0 (rebate applies)
- Total cost: $700,000
- Down payment (5% of $700,000): $35,000
- Plus closing costs: $25,000
- Total cash needed: $60,000
The saving on required upfront cash is meaningful — and in Ontario with the combined HST removal, the difference is even larger.
Calculate your new home costs
Use Smart Mortgage Calculator to analyze new construction listings on Realtor.ca or Zolo and see your complete cost breakdown — including how the GST rebate affects your total purchase cost and mortgage amount.
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Try the AnalyzerFrequently asked questions
Do I need to apply for the GST rebate or is it automatic?
In most cases your builder applies the rebate automatically and credits it against the purchase price. However you must confirm your first-time buyer status with the builder and sign a declaration. Your real estate lawyer will handle the paperwork at closing.
Can I use the GST rebate on a pre-construction condo I bought in 2025 that closes in 2026?
Yes — if your agreement was signed on or after March 20, 2025 you qualify. The rebate applies based on the agreement date, not the closing date.
Does the GST rebate affect how much CMHC insurance I pay?
Yes indirectly. If the GST is removed from your purchase price, your insured mortgage amount is lower — which reduces your CMHC premium. Every dollar off the purchase price reduces CMHC insurance by approximately 4%.
Can I use the FHSA and the GST rebate together?
Absolutely — these are separate programs that can be stacked. Your FHSA provides tax-free funds for the down payment while the GST rebate reduces your purchase price. They do not affect each other.
What if I buy with a partner who has previously owned a home?
If your co-buyer has previously owned a principal residence within the past 4 years, you may not qualify for the rebate as a couple. The eligibility rules are strict — consult a real estate lawyer and tax professional before assuming you qualify.
Does the GST rebate apply in all provinces?
The federal GST rebate applies Canada-wide. However provinces also charge their own provincial sales tax on new homes (HST in Ontario, BC PST, QST in Quebec) which is separate from federal GST. Ontario has an additional HST removal for 2026-2027. Other provinces have their own rebate programs — confirm with a local real estate lawyer.
The First-Time Home Buyers' GST Rebate became law on March 12, 2026. Tax rules and eligibility requirements may change. This article reflects the law as of June 2026. Always consult a real estate lawyer and tax professional before making purchasing decisions based on this program.