Buying a newly built home in Canada comes with an extra cost that resale buyers never have to think about: the Goods and Services Tax (GST), or the federal portion of the Harmonized Sales Tax (HST) in provinces that charge it. On a $700,000 new-construction condo, a 5% GST bill works out to $35,000 money that can make an otherwise affordable purchase feel out of reach.
To soften that blow, the federal government (and several provincial governments) offer rebate programs that return some or all of that tax to qualifying buyers. In 2025 and 2026, these programs expanded significantly, with a brand-new First-Time Home Buyers’ GST Rebate and a temporary Ontario enhancement that together can eliminate tens of thousands of dollars in tax. This guide walks through how the rebates work, who qualifies, how much you can expect, and how to actually claim the money.
What Is the GST/HST New Housing Rebate?
<cite index=”13-1″>The GST/HST new housing rebate lets an individual recover some of the GST, or the federal part of the HST, paid on a new or substantially renovated home bought from a builder including homes on leased land where the lease runs at least 20 years or includes an option to buy provided the home is meant to be the buyer’s or a relation’s primary residence.</cite> <cite index=”13-1″>Buyers can also treat their purchase as either “bought from a builder” or as an “owner-built house” for rebate purposes, depending on the situation, and there is a separate stream for people who build or substantially renovate their own home.</cite> <cite index=”13-1″>Corporations and partnerships cannot claim this rebate it is strictly for individuals.</cite>
There are now, in effect, three layers of GST/HST relief available to new-home buyers in Canada:
- The regular federal New Housing Rebate, which has existed for years and applies to lower-priced homes.
- The new First-Time Home Buyers’ (FTHB) GST Rebate, which took effect in 2026 and applies to homes worth up to $1.5 million.
- Provincial rebates and top-ups, such as Ontario’s standard HST rebate and its temporary 2026 enhancement, plus programs in British Columbia and elsewhere.
Each layer has its own price thresholds and rules, so it’s worth understanding them separately before estimating what you might actually receive.
The Regular Federal New Housing Rebate
This is the long-standing baseline rebate that predates the 2026 changes. <cite index=”5-1″>On homes priced at $350,000 or less, buyers can recover 36% of the GST paid, up to a maximum rebate of $6,300.</cite> The rebate shrinks on a sliding scale as the price rises, and <cite index=”1-1″>the regular federal rebate is eliminated entirely once the home’s price or value reaches $450,000.</cite>
That $450,000 ceiling has long been a sore point for housing advocates, since it was set years ago and never adjusted for the run-up in home prices across most Canadian markets. In cities like Toronto and Vancouver, almost no newly built home qualifies for the full regular rebate anymore which is precisely the gap the new First-Time Home Buyers’ rebate was designed to fill.
The New First-Time Home Buyers’ GST Rebate
The federal government’s most significant recent change is the FTHB GST Rebate, introduced through Bill C-4 (the “Making Life More Affordable for Canadians Act”). <cite index=”9-1″>Bill C-4 received Royal Assent on March 12, 2026, officially making the FTHB rebate law and allowing the Canada Revenue Agency to begin processing claims.</cite> <cite index=”4-1″>As of March 17, 2026, the CRA has been accepting applications for the rebate, which it describes as one of the government’s ways of making home ownership more affordable.</cite>
Unlike the regular rebate, which effectively disappears for homes over $450,000, the FTHB rebate targets a much higher price band:
- Homes valued up to $1 million: <cite index=”9-1″>the rebate eliminates 100 percent of the federal GST on the home.</cite>
- Homes valued between $1 million and $1.5 million: <cite index=”9-1″>the rebate phases out on a straight-line basis</cite>, meaning the closer the price gets to $1.5 million, the smaller the rebate becomes, reaching zero at that upper limit.
- Maximum rebate: up to $50,000, matching the full 5% GST on a $1-million home.
- Homes above $1.5 million do not qualify at all.
For context, <cite index=”10-1″>a home priced around $1.25 million would receive a partial rebate of roughly $25,000</cite> under the phase-out formula — a helpful benchmark for buyers trying to estimate their own savings.
It’s worth noting that early government communications referenced different effective dates. <cite index=”10-1″>Some early backgrounders cited a May 27, 2025 start date, while subsequent legislative updates and CRA guidance point to a finalized window beginning March 20, 2025</cite> for agreements of purchase and sale. Because of this shifting timeline, buyers who signed agreements in that window should double-check their specific eligibility date against current CRA guidance rather than relying on earlier news coverage.
Who Qualifies as a “First-Time Home Buyer”?
The FTHB rebate borrows most of its structural rules from the existing New Housing Rebate but adds a layer of buyer-specific conditions. <cite index=”15-1″>To be considered a first-time home buyer for this rebate, an individual generally needs to be at least 18 years old, be a Canadian citizen or permanent resident, and not have lived in a home — anywhere in the world that they or their spouse or common-law partner owned during the current calendar year or any of the four preceding years.</cite>
Beyond the buyer’s personal status, the property itself and the purchase timeline must also meet several conditions. <cite index=”14-1″>If the home is purchased from a builder, the FTHB rebate is available where the buyer meets (or would meet, if the price ceiling were raised) the eligibility rules for the existing GST/HST New Housing Rebate; the agreement of purchase and sale with the builder was signed on or after May 27, 2025 and before 2031; construction or substantial renovation is substantially completed before 2036; the home is intended as the buyer’s primary residence; the buyer is the first person to occupy it as a residence, and does so before 2036; and neither the buyer nor their spouse or common-law partner has previously received an FTHB rebate.</cite>
Owner-built homes follow a similar framework, but the construction start date matters more precisely. The CRA has clarified how it determines when construction “begins” for these purposes. <cite index=”14-1″>In one CRA example, an individual bought bare land in October 2024 intending to build a primary residence, received a building permit in February 2025, and had excavation begin in June 2025 — the CRA considered construction to have started when excavation work began, not when the land was purchased or the permit issued.</cite> This detail matters because it determines whether an owner-built project falls inside or outside the rebate’s qualifying window.
A few additional rules apply regardless of purchase type. <cite index=”10-1″>The rebate cannot be claimed more than once per individual, and a buyer is ineligible if their spouse or common-law partner has already claimed it. The measure applies only to newly constructed homes — including certain co-operative housing shares and owner-built homes — and does not extend to resale properties.</cite> <cite index=”10-1″>When a home is purchased jointly, at least one purchaser must meet the first-time buyer definition and be the first occupant, though additional restrictions can apply depending on the specific ownership arrangement.</cite>
Mobile and floating homes are also covered. <cite index=”14-1″>Buyers of a newly built or substantially renovated mobile home (including modular homes) or floating home intended as a primary residence may be eligible for the FTHB rebate on some of the GST or HST paid.</cite>
<cite index=”15-1″>In broad terms, a first-time home buyer can access the FTHB rebate by buying a new home from a builder, by building or hiring someone to build a home on land they own or lease, or by purchasing shares in a co-operative housing corporation.</cite>
Ontario’s Enhanced HST Rebate: A Temporary Boost to $130,000
Ontario has layered its own temporary enhancement on top of the federal changes, and this is where the headline figure of “$130,000″ comes from. <cite index=”6-1″>Ontario’s 2026 rebate expansion can eliminate up to $130,000 in combined HST on eligible new-home purchases made up of as much as $80,000 in provincial relief and up to $50,000 in federal relief.</cite> <cite index=”6-1”>Unlike the federal FTHB rebate, this Ontario enhancement applies to all eligible buyers, not just first-time buyers, for agreements of purchase and sale signed between April 1, 2026 and March 31, 2027.</cite>
The price thresholds mirror the federal structure but at Ontario’s own tax rate: <cite index=”6-1″>for homes priced up to $1,000,000, the full 13% HST may be rebated, while for homes between $1,000,000 and $1,500,000 the maximum combined rebate remains $130,000</cite> before phasing out. <cite index=”3-1″>More precisely, the program temporarily eliminates HST on qualified new homes valued up to $1 million, with the $130,000 maximum rebate available for homes valued up to $1.5 million and a gradual reduction for homes valued between $1.5 million and $1.85 million.</cite>
It’s important to understand that this is a one-year window, not a permanent policy and, as of the program’s announcement, some pieces were still working their way through the legislative process. <cite index=”3-1″>Administration of the rebates depends on the passage of provincial legislation, introduced in the Ontario legislature on May 5, 2026, along with corresponding federal GST/HST regulatory amendments, so builders and buyers were advised to keep monitoring official guidance as the rules were finalized.</cite> <cite index=”7-1″>By June 2026, the federal and Ontario governments had finalized the administrative details for the enhanced program, giving builders, buyers, lenders, and real estate professionals more certainty about how claims would actually be processed.</cite>
Because the enhancement removes the first-time buyer restriction for its one-year run, <cite index=”6-1″>any eligible buyer may qualify during the window regardless of how many homes they’ve owned previously.</cite>
Standard Provincial Rebates Outside the Temporary Window
Even without the temporary Ontario boost, most provinces with HST or provincial sales tax rules offer their own baseline new-home rebates, separate from the federal program.
- Ontario (standard rebate): <cite index=”5-1″>the maximum Ontario new housing rebate is up to $24,000, with a full rebate available under $350,000 and a partial rebate for homes priced between $350,000 and $450,000.</cite>
- British Columbia: <cite index=”5-1″>BC increased its provincial rebate threshold to $550,000 in early 2026, applying to the provincial portion of the tax.</cite>
- Alberta: <cite index=”5-1″>Alberta has no provincial sales tax, so there is no separate provincial new-housing rebate to layer on top of the federal one.</cite>
These standard provincial rebates can still apply on top of the federal GST rebate (regular or FTHB) for buyers who don’t fall within Ontario’s temporary 2026 enhancement window, so it’s worth checking the rules specific to the province where you’re buying.
How the Rebate Actually Gets Paid: Two Paths
Most buyers never have to write a cheque to the CRA and wait for a refund. In practice, the rebate is usually built directly into the price you pay at closing.
Path one: the builder credits the rebate. <cite index=”12-1″>In many new-build transactions, the builder credits the rebate to the purchaser directly at closing — reducing the GST/HST payable by the rebate amount — and then applies to the CRA to recover that amount itself, so the buyer benefits immediately without having to finance the tax through their mortgage.</cite> <cite index=”7-1″>This means the purchaser gets the benefit right away through a lower effective purchase price, the builder recovers the rebate through the CRA’s administrative process, and the buyer avoids financing the full HST amount as part of their mortgage — an approach that mirrors how many existing new-housing rebates have long been handled.</cite>
Path two: the buyer applies directly to the CRA. <cite index=”12-1″>If the builder does not credit the rebate at closing, the buyer can instead apply directly to the CRA after the purchase closes, submitting the rebate application to recover the amount afterward.</cite> This is common for buyers whose purchase agreements were signed before the new rules were finalized. <cite index=”9-1″>Because the FTHB rebate applies to eligible homes purchased on or after March 20, 2025, and because builders had no way to credit the rebate before Royal Assent was granted in March 2026, eligible buyers in that gap generally needed to apply directly to the CRA.</cite>
Which path applies to you often comes down to the wording of your purchase agreement. <cite index=”12-1″>Builder contracts vary: some assume the buyer will qualify for applicable rebates and price the home accordingly, while others explicitly require the buyer to assign the rebate to the builder and if the agreement is silent on the newer rebate altogether, the buyer may need to claim it directly.</cite> Given how much money is at stake, it is worth reviewing this clause carefully ideally with a real estate lawyer before signing.
Applying Directly: Forms and Documentation
For buyers who need to apply on their own rather than relying on a builder credit, the process runs through a specific CRA form. <cite index=”9-1″>Where the builder applies on the buyer’s behalf, the two parties jointly complete Form GST190, the GST/HST New Housing Rebate Application for houses purchased from a builder; where the individual applies directly, they complete the same GST190 form themselves.</cite>
Supporting paperwork matters just as much as the form itself. <cite index=”12-1″>CRA applications typically require documentation confirming eligibility along with details of the purchase transaction itself.</cite> Because the rebate is now tied to first-time buyer status for the FTHB program, buyers may also need to provide formal declarations confirming that status as part of the transaction. Practically, this means keeping your signed Agreement of Purchase and Sale, all correspondence with the builder, your Statement of Adjustments, and closing documents in one place — these records establish both your agreement date and your intended use of the property, which the CRA may request when reviewing a claim.
Common Pitfalls to Watch For
A handful of recurring issues trip up buyers navigating these overlapping programs:
- Assuming the advertised price already includes the rebate. Builder-advertised prices sometimes bake in the rebate and assume the buyer will assign it to the builder always check the agreement of purchase and sale or statement of adjustments before assuming what you’ll actually owe.
- Missing the price cutoffs. The regular federal rebate disappears entirely above $450,000, while the FTHB rebate phases out between $1 million and $1.5 million a difference of a few thousand dollars in price can meaningfully change your rebate.
- Confusing eligibility windows. Because the FTHB rebate’s start date and Ontario’s temporary enhancement both hinge on specific agreement dates (not closing dates), buyers should confirm exactly when their purchase agreement was signed relative to the qualifying windows.
- Assuming resale homes qualify. None of these programs apply to resale properties they are strictly for new construction, substantial renovations, owner-built homes, and qualifying co-op shares.
- Overlooking the one-per-person limit. The FTHB rebate can only be claimed once per individual, and a buyer is disqualified if their spouse or common-law partner has already used it.
- Not confirming legislative status. Because some provincial pieces (like Ontario’s enhancement) were tied to legislation still moving through the legislature earlier in 2026, buyers closing during that period may have needed to apply retroactively to the CRA rather than receiving an automatic builder credit.
Final Thoughts
The combination of the regular federal rebate, the new First-Time Home Buyers’ GST Rebate, and Ontario’s temporary enhanced HST rebate has meaningfully changed the math on buying new construction in Canada particularly for first-time buyers in higher-priced markets who previously fell outside the old $450,000 cutoff entirely. A buyer purchasing a $950,000 first home in Ontario during the 2026–2027 window could, in principle, see close to $130,000 in combined tax relief, turning what used to be a punishing tax bill into a genuine affordability lever.
That said, these are relatively new and, in places, still-evolving rules. Legislative timing, agreement dates, and builder contract language all affect whether relief arrives as an automatic price reduction or requires a direct CRA application after closing. Anyone planning a new-home purchase should confirm current details directly with the CRA, their province’s finance ministry, and a real estate lawyer before finalizing an agreement — rebate rules of this scale are worth getting exactly right.
