A Big Break for First-Time Buyers — & it Could Save You Thousands on Your First Home
On May 27, 2025, the Canadian government unveiled a landmark tax policy aimed at addressing housing affordability and giving first-time homebuyers a leg up. The newly introduced First-Time Home Buyers’ GST Rebate eliminates the 5% Goods and Services Tax (GST) on newly built homes for eligible purchasers — potentially saving them tens of thousands of dollars.
This initiative applies to first-time buyers purchasing newly constructed homes valued up to $1 million. For homes priced between $1 million and $1.5 million, the rebate phases out on a sliding scale. For example, a $1.25 million home would receive a 50% rebate, or $25,000 in tax savings.
Buyers must meet specific criteria: they must be at least 18 years old, Canadian citizens or permanent residents, and not have owned a home in the current or previous four calendar years. The rebate applies to new homes purchased from builders, owner-built homes, and cooperative housing units.
Prime Minister Mark Carney, announcing the policy, said, “Eliminating the GST will save first-time homebuyers up to $50,000 and spur housing construction across the country.” It’s estimated this program will save Canadians a combined $3.9 billion over the next five years and help stimulate homebuilding during a time of national housing shortage.
The real estate industry has largely welcomed the news. According to CMHC data, housing starts in many regions have fallen short of population-driven demand in recent years. By easing the tax burden, the rebate could encourage developers and buyers alike to return to the market.
If you’re a first-time buyer considering a move, this rebate could tip the scales in your favour. Navigating new incentives, complex contracts, and a shifting market is easier when you have the right guidance. At R3 Hayes Real Estate Group, we’re committed to helping you make informed, confident decisions — every step of the way. Let our experience, insight, and client-first approach make your first home purchase a successful one.
References
- Canada Mortgage and Housing Corporation. (2024). Housing Market Outlook – National Highlights.
- Canada Revenue Agency. (2025). GST/HST new housing rebate.
- Department of Finance Canada. (2025a, May 27). GST relief for first-time home buyers on new homes valued up to $1.5 million.
- Department of Finance Canada. (2025b, March 20). Budget 2025: Making Housing More Affordable.
- Prime Minister of Canada. (2025, March 20). Prime Minister Carney will eliminate GST for first-time homebuyers.
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