GST on a new home

A few real numbers

Common questions about GST on a new home

• Can a first-time buyer avoid GST on a new home now?+

  For many, yes — this is the part that recently changed in buyers’ favour. The new First-Time Home Buyers’ GST Rebate (enacted by Bill C-4, Royal Assent March 2026) removes the full 5% GST on a qualifying first-time buyer’s new home priced up to $1,000,000, with a reduced rebate from $1,000,000 to $1,500,000, to a maximum of $50,000. So a first-time buyer of an $850,000 new townhouse who would have paid $42,500 in GST now pays nothing. It applies to purchase agreements signed on or after March 20, 2025. You generally need to be a first-time buyer who will live in the home — confirm the exact conditions with CRA or your lawyer, because the eligibility details matter.

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  The rebate gives back 100% of the GST on a new home up to $1,000,000 (so the maximum rebate is 5% × $1,000,000 = $50,000), then phases out in a straight line between $1,000,000 and $1,500,000, reaching zero at $1,500,000. The phase-out works out to roughly $50,000 × ($1,500,000 − price) ÷ $500,000 — so at $1,200,000 about $30,000 of the $60,000 GST is rebated. Broadly, you qualify if at least one buyer is a first-time buyer (hasn’t owned, or lived in a home they owned, recently), the home is your primary residence, and the agreement was entered on or after March 20, 2025 (the program runs to the end of 2030, with construction-timing conditions). The authority is the CRA First-Time Home Buyers’ GST Rebate page — confirm the live details there before you rely on them.
• What is the older GST New Housing Rebate, and does it still apply?+

  It still exists, but for most Lower Mainland buyers it gives nothing. The older rebate returns up to 36% of the GST, capped at $6,300, on a new home priced at or under $350,000, phasing out to zero by $450,000. Those thresholds were set in 1991 and never raised, so almost every new home in Metro Vancouver and the Fraser Valley sits above $450,000 and gets no rebate from it. If you’re a first-time buyer, the new rebate above is the one that matters; the older one is mainly relevant to repeat buyers of lower-priced new homes.
• How does GST work on a $1.2M new home for a first-time buyer?+

  The 5% GST on $1,200,000 is $60,000. Because the price is between $1,000,000 and $1,500,000, the first-time-buyer rebate is partial: roughly $30,000 comes back, so the net GST is about $30,000. (Below $1,000,000 the rebate would be the full amount; above $1,500,000 there’s no first-time-buyer rebate.) For a repeat buyer at the same price, neither rebate applies and the full $60,000 is owed. This is exactly the kind of number we’d model together before you sign, so completion day holds no surprises.
• Does any rebate apply to investors or rental properties?+

  Not the first-time-buyer or owner-occupier rebates — those require you (or a close relation) to live in the home. Investors buying a new unit to rent may instead qualify for the GST New Residential Rental Property Rebate, which uses the same older phase-out math ($350,000 full to $450,000 zero) and so usually returns nothing at Lower Mainland prices. It requires a one-year minimum tenancy at fair-market rent, and the investor self-assesses and remits the GST, then files within two years. The CRA audits this area closely, so it’s one to handle with an accountant.
• How is GST handled on a presale assignment?+

  Carefully — and with an accountant. Since May 7, 2022, every assignment of a new or substantially-renovated home is subject to GST: the person assigning charges 5% GST on the assignment fee (the amount above the returned deposit). The buyer who eventually completes may still claim the applicable new-home rebate on the original price if they qualify. The assignment fee itself isn’t rebatable. The CRA looks at this area closely, so it’s worth proper advice before assigning or taking an assignment.
• How do I actually claim the rebate?+

  Usually the builder handles it for you. The most common path: the builder credits the rebate against your price, and you sign Form GST190 at closing assigning the claim to them — so you simply see a lower net price with nothing out of pocket. The less common path: you pay the GST at closing and file the form yourself (within two years), and CRA pays you directly. Your lawyer or notary and the builder will tell you which path applies to your purchase; keep every document for six years just in case.
• How does the GST rebate interact with the BC Newly Built Home PTT exemption?+

  They’re separate programs for separate taxes, and it’s easy to mix them up. The GST rebates (this guide) apply to the federal 5% GST. The BC Newly Built Home exemption applies to the provincial Property Transfer Tax — full exemption to $1,100,000, phasing out by $1,150,000. So a first-time buyer of a $1,000,000 new home could pay zero PTT (provincial exemption) and zero GST (federal first-time-buyer rebate) on the same purchase — two different breaks from two different governments. Your lawyer’s statement of adjustments lists each separately.