July 10, 2025

Major GST Relief for First-Time Home Buyers: What Toronto Buyers Need to Know

by Sunil Joshi in Real estate

The federal government has introduced a significant tax relief measure aimed at easing the financial burden for first-time home buyers in Canada. Effective May 27, 2025, the First-Time Home Buyers’ GST Rebate (FTHB GST Rebate) offers substantial savings on new homes, if passed, potentially up to $50,000. This initiative is designed to make homeownership more accessible and stimulate the construction of new homes across the country. adamgoss.ca+7evolvedrealty.ca+7canada.ca+7

What Is the FTHB GST Rebate?

The FTHB GST Rebate eliminates the Goods and Services Tax (GST) on new homes valued up to $1 million and provides a phased reduction for homes priced between $1 million and $1.5 million. Homes priced above $1.5 million are not eligible for this rebate. canada.ca+1mnp.ca+1tcf-fca.ca

Rebate Structure:

This rebate applies to new homes purchased from builders, owner-built homes, and shares in co-operative housing corporations, provided the unit is intended as the buyer’s primary residence. mnp.ca+4tcf-fca.ca+4mmgmortgages.ca+4

Eligibility Criteria

To qualify for the FTHB GST Rebate, individuals must:

The rebate is available for agreements entered into on or after May 27, 2025, and before 2031, with construction substantially completed before 2036. evolvedrealty.ca+4tcf-fca.ca+4canada.ca+4

Important Dates

Limitations to Consider

  • The rebate can only be claimed once in a lifetime.
  • If a spouse or common-law partner has previously claimed the rebate, the individual is ineligible.
  • Assignment sales (transfers of purchase agreements before construction completion) are ineligible if the original agreement was signed before May 27, 2025.
  • Cancelled and re-signed purchase agreements post-May 27, 2025, may disqualify applicants from the rebate. evolvedrealty.ca+5mmgmortgages.ca+5tcf-fca.ca+5mmgmortgages.ca+4evolvedrealty.ca+4storeys.com+4

Impact on Toronto’s Housing Market

In Toronto, where average home prices often exceed $1 million, this rebate is expected to have a significant impact. Approximately 92% of new builds in Toronto are anticipated to qualify for full or partial tax relief for homes priced up to $1.5 million. This measure aims to reduce upfront costs for buyers and stimulate the construction of new homes in the region .moneysense.ca+1canada.ca+1

Industry Reactions

The Canadian Home Builders’ Association (CHBA) has praised the government’s action, noting that many potential buyers had been hesitant due to uncertainty about the rebate. However, they also advocate for extending the GST relief to all buyers of new homes, not just first-time buyers, to further boost housing supply and affordability .chba.ca+1mpamag.com+1

How We Are Law Can Assist You

As a real estate law firm in Toronto, we are here to guide you through the complexities of this new rebate. Whether you’re a first-time home buyer, a builder, or a real estate professional, understanding the nuances of the FTHB GST Rebate is crucial. Our team can provide:

  • Detailed explanations of eligibility criteria.
  • Assistance with navigating the application process.
  • Advice on structuring transactions to maximize rebate benefits.
  • Guidance on compliance with timelines and conditions.

If you’re considering purchasing a new home or have questions about how this rebate applies to your situation, contact us today. We’re here to ensure you make informed decisions and take full advantage of the opportunities available.

Reach out to us via email at info@wearelaw.ca to discuss your condominium needs today. Or, for an instant quote anytime, check out our online cost calculator at www.WeAreLaw.ca. Let’s make your condo journey a breeze together!

Written by Karwan Sulaivany, Law Student at We Are Law.