HST/GST Rebate on New Homes in Canada: Who Qualifies, How Much You Get & How to Apply

Buying a new home in Canada already comes with financial pressure. Home prices remain high. Closing costs add up fast. Legal fees, land transfer tax, and adjustments often catch buyers off guard. What makes this worse is that many buyers don’t understand the GST rebate on new homes.

In May 2025, the federal government introduced a 100% GST rebate. This single tax can increase the purchase price by tens of thousands of dollars.

Some buyers miss the rebate completely. Others lose eligibility due to minor mistakes. It includes renting the home too early or misunderstanding occupancy rules. In some cases, buyers receive a notice years later asking them to repay the rebate after a CRA review.

This confusion is common among first-time buyers, students, and newcomers to Canada. The rules feel technical. The language feels complex. And many online explanations skip important details.

This guide explains the HST/GST rebate on new homes in Canada in clear, simple language. It covers who qualifies, how much money buyers can get back, and how to apply correctly. It also explains the first home buyer GST rebate, common eligibility questions, and costly mistakes to avoid.

What Is the GST/HST Rebate on New Homes in Canada?

When buying a resale home in Canada, GST or HST does not apply. But the rules change when purchasing a newly built home or a substantially renovated property.

GST or HST applies to:

• Newly built houses
• Pre-construction condos
• Owner-built homes
• Homes with major renovations

The gst rebate new homes program exists to reduce this tax for buyers who plan to live in the home as their primary residence. The rebate refunds a portion of the GST or HST already paid.

GST vs HST: Understanding the Difference

Tax Type	Description	Tax Rate	Applies In
GST (Goods and Services Tax)	Federal sales tax	5%	Alberta, Saskatchewan, Manitoba
HST (Harmonized Sales Tax)	Combined federal and provincial sales tax	13% or 15%	Ontario, Nova Scotia, New Brunswick, Newfoundland & Labrador, Prince Edward Island (PEI)

Additional Note:
The Canada New Home GST rebate applies under both the GST and HST systems. The rebate amount varies based on the province and the purchase price of the home.

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Putting First-Time Buyers First

As we discussed above, the federal government has introduced a new GST rebate to help first-time homebuyers get ahead. The goal is simple: make new homes more affordable and encourage more home construction across Canada.

Confirmed in the Fall 2025 Liberal Budget, this rebate applies to eligible first-time buyers purchasing newly built homes. This includes detached houses, townhomes, and condominiums.

The rebate can cover up to the full 5% GST, depending on the home’s purchase price:

• 100% GST rebate on homes priced up to $1 million
• Partial rebate on homes priced between $1 million and $1.5 million
• No rebate on homes priced above $1.5 million

For example, on a $1 million new-build home, the rebate could save a buyer up to $50,000. This can significantly reduce upfront costs. And it helps buyers put more toward their down payment, making homeownership more achievable.

Why the GST/HST Rebate Matters for New Homes in Canada?

Buying a new home in Canada is expensive. Every dollar counts. That’s where the GST/HST rebate comes in.

This rebate helps reduce the tax you pay when you buy a newly built home. For many buyers, especially first-time buyers, this can mean real savings right from the start.

Here’s why the GST/HST rebate is important:

• Lower upfront costs
  You pay less tax at purchase, which makes buying a home more affordable.
• More money where it matters
  The savings can go toward your down payment, closing costs, or moving expenses.
• Helpful for first-time buyers
  New buyers often feel the biggest squeeze. This rebate gives them some breathing room.
• Supports new home construction
  By encouraging people to buy new builds, the rebate helps builders move forward with projects and adds more homes to the market.

How the GST Rebate New Homes Program Works?

The process follows four basic steps:

1. A buyer purchases or builds a new home
2. GST or HST gets included in the price
3. The buyer or builder applies for the rebate
4. CRA issues a refund if the eligibility requirements are met

In many pre-construction purchases, builders apply the rebate upfront and reduce the purchase price. However, this only applies if the buyer qualifies. 

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Who Is Eligible for the GST New Housing Rebate?

Many buyers ask the same question: who is eligible for GST new housing rebate? A buyer may qualify if all of the following conditions are met:

• The home is newly built or substantially renovated
• The buyer plans to use it as a primary residence
• Also, the buyer or an immediate family member lives in the home
• The home value falls within CRA limits

Immediate family members include:

• The buyer
• A spouse or common-law partner
• Children
• Parents

The gst rebate new homes program focuses on owner-occupied properties. Investment-only properties follow different rules.

First Home Buyer GST Rebate: Eligibility Rules

A first-time buyer may qualify if:

• The home is the buyer’s primary residence
  
• The buyer lives in the home after closing
  
• The purchase price falls within CRA limits
  

First-time buyers often face fewer complications because there is no prior rental use or resale history.

Who Does Not Qualify for the Rebate?

A buyer may lose eligibility if they:

• Purchase the property only for rental or resale purposes
• Never occupy the home as a primary residence
• Quickly flip the home after purchase
• Provide false or misleading information

The CRA closely reviews these cases. If the CRA denies the rebate, the buyer must repay the amount and may face penalties.

GST Rebate or First-Time Home Buyers’ Tax Credit: Which Helps You More?

Canada offers more than one tax benefit for first-time homebuyers. Two of the most common are the GST New Home Rebate and the First-Time Home Buyers’ Tax Credit (HBTC). While both help reduce costs, they work in very different ways.

Key Difference at a Glance

Feature	GST New Home Rebate	First-Time Home Buyers’ Tax Credit
What it applies to	GST/HST on newly built homes	Income tax after you buy a home
Who it helps	Buyers of new construction	First-time homebuyers
When you receive it	At purchase or shortly after	When you file your tax return
Potential savings	Up to tens of thousands of dollars	Up to $1,500 in tax relief
Based on	Home price and province	Personal income tax

GST New Home Rebate

The GST rebate reduces or refunds the GST or HST paid on a newly built home. The savings depend on the home’s price and where it is located.

• Can cover up to 100% of the GST on eligible homes
• Offers large upfront savings
• Helps lower closing costs or increase your down payment

This rebate is especially valuable for buyers purchasing new builds.

First-Time Home Buyers’ Tax Credit

The First-Time Home Buyers’ Tax Credit is a non-refundable income tax credit. You claim it when you file your taxes after buying a home.

• Provides up to $1,500 in tax savings
• Helps reduce your income tax bill
• Does not reduce the purchase price of the home

Why Both Matter?

These two programs work best together. The GST rebate helps with upfront costs, while the First-Time Home Buyers’ Tax Credit offers tax relief later on.

Using both can make buying your first home more affordable and easier to manage financially.

How Much GST Rebate Can You Get on a New Home?

Federal GST Rebate

• Maximum rebate: $6,300
• Applies fully to homes priced up to $350,000
• Phases out between $350,000 and $450,000
• No federal rebate above $450,000

Even when the federal portion phases out, provincial rebates may still apply.

Provincial HST Rebates: Province-Wise Examples

Ontario

• Provincial rebate up to $24,000
• Combined federal + provincial rebate can exceed $30,000

British Columbia

• GST applies instead of HST
• The provincial rebate structure differs

Alberta

• Only 5% GST applies
• Federal rebate still available

Understanding province-specific rules helps maximize the Canada new home GST rebate.

New GST Rebate Rules Buyers Should Know

The new GST rebate framework focuses on stronger verification. CRA now checks:

• Proof of occupancy
• Utility bills
• Address history
• Tax filings

Buyers should keep all documents showing the home was used as a primary residence.

How to Apply for the GST/HST Rebate on New Homes?

Option 1: Builder Applies on the Buyer’s Behalf

• Common for pre-construction condos
• Rebate deducted from purchase price
  

Option 2: Buyer Applies Directly

• Used for owner-built homes
• Used if the rebate was not applied at purchase
  

Required documents include:

• CRA GST rebate forms
• Purchase agreement
• Proof of occupancy

Common Mistakes That Can Make You Lose the GST Rebate

The GST rebate can save first-time homebuyers thousands of dollars. But some mistakes can cost you this valuable benefit. Knowing what to avoid helps ensure you get your rebate without issues.

1. Buying Only to Rent or Resell

If you purchase the home just to rent it out or flip it for a profit, you lose eligibility. The rebate is meant for primary residences, not investment properties.

2. Not Living in the Home

You must occupy the home as your principal residence. If you never move in, the CRA can deny your rebate.

3. Flipping the Home Too Quickly

Selling a new home shortly after purchase can trigger a review. The CRA may consider it a resale. It is making you ineligible for the rebate.

4. Providing False or Incomplete Information

Always give accurate and complete details on your application. Providing incorrect information—even by mistake—can lead to repayment plus penalties.

5. Missing Deadlines or Paperwork

Submitting forms late or skipping required documents can delay or cancel your rebate. Thus, you should keep track of deadlines and file carefully.

GST Rebate New Homes: Condos vs Houses

Condos

• Higher audit risk
• Proof of occupancy required
  

Houses and Townhomes

• Easier documentation
• More flexibility
  

The gst rebate for new homes rules apply to both, but condos face stricter review.

Canada New Home GST Rebate for Owner-Built Homes

Owner-built homes also qualify if:

• The buyer owns the land
• Contractors are hired
  
• The buyer lives in the home
  

The rebate application starts after construction ends. You can explore our comprehensive guide on obtaining a real estate license in Ontario to gain a deeper understanding of the market and make informed purchasing decisions.

How the GST/HST Rebate Is Calculated: How Much Can You Get?

Understanding how the GST/HST rebate is calculated helps buyers set realistic expectations and avoid confusion at closing.

Many buyers assume the rebate covers all the tax paid, but that’s not how it works. The rebate follows clear formulas based on home price, province, and tax type.

Federal GST Rebate: How the Amount Is Calculated

The federal portion applies across Canada, where GST or HST is charged.

Here’s how the calculation works:

• 5% GST applies to new homes
• The federal rebate equals 36% of the GST paid
• The maximum federal rebate is $6,300

Price limits matter:

• Homes priced up to $350,000 qualify for the full rebate
• Homes priced between $350,000 and $450,000 qualify for a partial rebate
• Homes priced over $450,000 do not qualify for the federal rebate

Example:
If a new home costs $350,000:

• GST = $17,500
• Rebate = 36% of $17,500
• Federal rebate = $6,300 (maximum)

Partial Federal Rebate (Homes $350,000–$450,000)

When the home price falls in this range, the rebate reduces gradually.

Example:
Home price: $400,000

• GST = $20,000
• Rebate reduces based on CRA’s phase-out formula
• Rebate will be less than $6,300

Once the price crosses $450,000, the federal GST rebate drops to zero.

Provincial HST Rebate: How It’s Calculated

In HST provinces, buyers may also receive a provincial rebate, which often provides the largest savings.

Ontario (13% HST) example:

• Provincial portion of HST = 8%
• Maximum provincial rebate = up to $24,000

Example:
New home price: $700,000

• Total HST paid = $91,000
• Provincial rebate = capped at $24,000
• Federal rebate may still apply, depending on price

This is why Ontario buyers often receive rebates of $20,000–$ 30,000 or more.

GST-Only Provinces (Alberta, Saskatchewan, Manitoba)

In provinces without HST:

• Only 5% GST applies
• Only the federal rebate is available

Example:
New home price: $350,000 in Alberta

• GST paid = $17,500
• Federal rebate = $6,300

Owner-Built Homes: Special Calculation Rules

For owner-built homes, the rebate applies to:

• Construction costs
• Materials
• Certain professional fees

The rebate is calculated after construction is complete and based on the fair market value, not just expenses.

Is GST Removed from New Homes in Canada?

Yes, Canada is in the process of removing GST (federal sales tax) on new homes for eligible buyers. The government specifically targets first-time home buyers and introduces the change through new federal legislation.

Current Situation

• The Canadian government has introduced a First-Time Home Buyers’ GST Rebate that would effectively eliminate GST on new homes with a value up to $1 million for qualifying first-time buyers.
• For homes priced between $1 million and $1.5 million, the GST relief is gradually reduced (a partial rebate).
• For homes valued at $1.5 million or more, no GST rebate is provided under this program.

What this means in practice:

• Eligible first-time home buyers would pay no GST on new homes up to $1 million.
• They could recover a significant portion (up to ~$50,000) of the GST paid through the rebate if the home qualifies and they meet the conditions. 

Why Buyers Often Get Confused About Rebate Amounts?

Many buyers expect:

• A full refund of GST or HST
• The same rebate in every province

In reality:

• Rebates have caps and phase-outs
• Provincial rules vary
• Home prices play a major role

That’s why two buyers paying similar prices can receive very different rebate amounts.

Quick Summary: How Much Can You Get?

Province Type	Potential Rebate
GST-only provinces	Up to $6,300
HST provinces	Up to $30,000+
Owner-built homes	Varies by value

How to claim GST Refund on Property Purchase?

Here’s how you can claim a GST refund (rebate) on a property purchase in Canada — especially for a new home:

1. Determine Which Rebate Applies

First-Time Home Buyers’ GST Rebate

A new federal rebate that lets eligible first-time buyers recover up to 100 % of the GST (federal portion of GST/HST) on new or substantially renovated homes used as a primary residence. You could get up to $50,000 back, depending on the home price.

GST/HST New Housing Rebate

An existing rebate under the GST/HST system for qualifying new or substantially renovated homes. This can apply depending on price and usage (e.g., purchased from a builder).

2. Pay the GST at Closing

You must pay the GST/HST to the builder or seller at the time of purchase — this is what you will later claim back. For the new first-time buyer rebate, you pay GST first and then apply for a refund.

3. Complete the Appropriate Rebate Form

After paying GST/HST:

• For the first-time home buyers’ rebate, you will use updated CRA forms (e.g., Form GST190 for homes purchased from a builder) once they become available after the legislation is finalized.
• For the classic GST/HST new housing rebate, you also use Form GST190 (or related worksheets) to claim the rebate with the Canada Revenue Agency (CRA).

4. Submit the Rebate Application

• Submit the completed rebate application and supporting documents (purchase agreement, proof of payment, etc.) to the Canada Revenue Agency (CRA) once the forms are ready.
• If you’re claiming a GST/HST new housing rebate, you typically must file within two years of paying the tax.

5. Receive Your Refund

If your application is approved, the CRA will issue the refund directly or apply it as a credit against the GST/HST you owe.

When it comes to the GST rebate, timing is crucial. Missing the deadline could cost you thousands. Discover key dates and how real estate agent rules can impact your eligibility and chance to claim your rebate.

FAQ

Final Thoughts: Why Understanding the GST Rebate Matters

The GST rebate on new homes helps buyers manage high housing costs in Canada. Many buyers miss out because they do not understand the rules. Some overpay GST. Others lose the rebate due to small mistakes.

Knowing how the rebate works helps you plan better. You can estimate your true purchase cost. You can also avoid surprise tax bills later. Missing a deadline or using the home incorrectly can lead to repayment.

Buying a home is a major financial step. The GST rebate is not just a bonus. It is part of buying smart. Learning the rules early reduces risk. It also helps you make confident decisions in a competitive housing market.

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