How does the first time home buyers' GST rebate work, and how much does my client get?
As of October 2026, the first time home buyers' GST rebate refunds 100% of the GST, or the federal part of the HST, up to $50,000 on a new or substantially renovated home valued up to $1 million. It phases out to nil at $1.5 million. The purchase agreement must be signed from March 20, 2025 and before 2031.
How much does the rebate pay at each price?
The rebate is 100% of the GST or the federal part of the HST, capped at $50,000, for a home valued at $1 million or less. Between $1 million and $1.5 million the cap shrinks in a straight line, and at $1.5 million or more there is no rebate canada.ca. It's a top up to the regular GST/HST new housing rebate, not a replacement
canada.ca.
| Price of a new home bought from a builder | GST or federal HST at 5% | First time buyer rebate | Federal tax left to pay |
|---|---|---|---|
| $400,000 | $20,000 | $20,000 together with the new housing rebate | $0 |
| $700,000 | $35,000 | $35,000 | $0 |
| $1,000,000 | $50,000 | $50,000 | $0 |
| $1,100,000 | $55,000 | $40,000 | $15,000 |
| $1,250,000 | $62,500 | $25,000 | $37,500 |
| $1,400,000 | $70,000 | $10,000 | $60,000 |
| $1,500,000 or more | $75,000 or more | $0 | All of it |
The rebate covers the federal part only. In an HST province the provincial part is a separate claim, covered below.
A $1.2 million home gets $30,000: how the phase out formula works
For a home bought from a builder with total consideration between $1 million and $1.5 million, CRA memorandum 19-3-10 sets the rebate at C × [($1,500,000 − D) ÷ $500,000], where C is the lesser of $50,000 and the GST or federal HST paid, and D is the total consideration (ETA s. 254(2.1)) canada.ca.
| Step | Amount |
|---|---|
| Purchase price (D) | $1,200,000 |
| GST or federal HST at 5% | $60,000 |
| C: lesser of $50,000 and $60,000 | $50,000 |
| $1,500,000 minus $1,200,000 | $300,000 |
| $300,000 ÷ $500,000 | 0.6 |
| Rebate: $50,000 × 0.6 | $30,000 |
| Federal tax still owing: $60,000 minus $30,000 | $30,000 |
CRA's own example lands at the midpoint: a $1.25 million home gets 50% of the $50,000 maximum, or $25,000 canada.ca. For a home at $1 million or less, the formula is the lesser of $50,000 and the tax paid, minus any regular new housing rebate the buyer is entitled to
canada.ca. That subtraction is why the two rebates together reach 100% of the GST on a home of $450,000 or less, and never more than 100%.
An owner built home uses fair market value instead of price: the memo's formula takes the greater of $1 million and the fair market value, and the same $1.5 million cutoff applies (ETA s. 256(2.1)) canada.ca.
Who counts as a first time home buyer?
Your client must be at least 18, a Canadian citizen or permanent resident, and must not have lived, as a primary residence, in a home that they or their spouse or common law partner owned (in or outside Canada) in the calendar year of the purchase or the four calendar years before it canada.ca. Neither of them can have received this rebate before.
The test is applied on one date, and the date depends on how the home was acquired: ownership transfer for a builder purchase or a housing cooperative share, possession transfer for a home on leased land, and the earlier of first occupancy or substantial completion for an owner built home canada.ca.
CRA's example shows how the window moves. A buyer who sold their last home in June 2022 and takes ownership of the new one in August 2026 fails, because 2022 is inside the 2022 to 2026 window. Push the ownership transfer to February 2027 and they qualify, because the window becomes 2023 to 2027 canada.ca.
The home itself must be bought or built as your client's primary residence, and your client must be the first individual to occupy it after construction or the substantial renovation is substantially completed canada.ca.
Which dates decide whether the purchase is in?
| Way the home was acquired | Window that must be met | Completion deadline |
|---|---|---|
| Home and land bought from a builder | Agreement signed on or after March 20, 2025 and before 2031; construction begins before 2031 | Substantially completed and ownership transferred before 2036 |
| Home bought, land leased from a builder | Agreement signed on or after March 20, 2025 and before 2031; construction begins before 2031 | Substantially completed and possession transferred before 2036 |
| Owner built or owner renovated | Construction begins on or after March 20, 2025 and before 2031 | Substantially completed and first occupied before 2036 |
| Housing cooperative share | Share agreement signed on or after March 20, 2025 and before 2031 | Complex substantially completed and share ownership transferred before 2036 |
These windows come from CRA's eligibility page canada.ca. For a conditional agreement, the date both parties agreed to the sale counts, not the date the conditions were waived
canada.ca.
For an owner built home, construction generally begins when excavation begins. In CRA's example, land bought in October 2024 and a permit issued in February 2025 don't matter; excavation on June 1, 2025 is the start, so the home qualifies canada.ca.
How does your client claim it, including a closing before Royal Assent?
The builder can credit the rebate at closing and file the application itself. If it doesn't, your client files a type 2 application (type 5 for a home on leased land) on Form GST190 or online through their CRA account under "File a GST/HST rebate", and a representative can file through Represent a Client canada.ca. An owner built home is claimed on Form GST191
canada.ca.
The deadline is 2 years from the date ownership was transferred, or from the possession date for type 5 canada.ca.
Royal Assent came on March 12, 2026, so builders couldn't credit the rebate on 2025 and early 2026 closings canada.ca. Those buyers apply directly to the CRA
canada.ca. If the builder credited only the regular new housing rebate, your client files a type 2 or type 5 application for the first time buyer rebate alone, still inside the 2 year limit
canada.ca. A client who took ownership in July 2025 therefore has until July 2027.
What about joint buyers, a spouse, and the Ontario portion?
Only one buyer can apply, and that buyer must be the first time buyer (ETA s. 262(3)). A parent on title who isn't a first time buyer doesn't block the child's claim canada.ca.
The rebate is once per lifetime, and that limit reaches the couple: no rebate if your client or their spouse or common law partner previously applied for one and was entitled to it (ETA s. 263.3) canada.ca.
In Ontario a separate provincial rebate can cover up to $80,000 of the provincial part of the HST, using the same eligibility conditions as the federal rebate canada.ca. It's claimed on Form RC7190-ON alongside the GST190
canada.ca. For the regular rebate on the provincial part, see the GST/HST new housing rebate. The separate income tax credit for first time buyers is covered in the home buyers' amount.
Sources
Can my client get both this rebate and the regular new housing rebate?
Yes, but the first time buyer rebate is reduced by the regular rebate, so together they cover up to 100% of the GST or federal HST, capped at $50,000 canada.ca. Above $450,000 the regular federal rebate is nil, so the first time buyer rebate does all the work.
Does a resale home qualify?
My client signed the agreement in January 2025 and closed in 2026. Do they qualify?
No. A builder purchase needs an agreement signed on or after March 20, 2025, and the closing date can't fix an earlier agreement canada.ca. The regular new housing rebate may still apply.
How long does my client have to apply?
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.