Breaking: First-Time Buyers in Canada Get Tax Relief on New Homes

Jun 19, 2025

Young families and first-time buyers have struggled for a long time because of the housing affordability crisis in Canada. Relief from GST for people buying their first home has been announced by the government, making homeownership more realistic this year and into the future. This is what you should know about the new policy.

What Is the GST Relief for First-Time Buyers?

If you buy a new construction or major renovation in Canada, a 5% Goods and Services Tax (GST) is added to the purchase price. Many first-time buyers were unable to afford a house because the costs added up to thousands.

Under the GST relief plan, those who buy a home for the first time may qualify for either a rebate or have the whole tax amount waived, depending on what they earn and the price of the property. Affordability, the rise of homeowners and bringing in more housing supply are all reasons behind these policies.

Who Is Eligible?

For GST relief, buyers should meet certain standards as listed below.

You are a first-time homebuyer if you haven’t owned a house in the last 4 years.
Consider living in a home that has been built recently or greatly improved.
Try to settle the family in your home rather than in other places.
Make sure your income and home value are above the set minimums by province.

Other extra provincial rebates, such as land transfer tax rebates, could be an option, providing an additional incentive to save money.

How Much Can You Save?

How much you save on GST depends on how much your home is worth.

On a home that costs $600,000, the GST comes to $30,000.
Full GST relief on land means eligible buyers could save everything they were charged.
You can only use partial rebates for homes below an amount determined by the local government (usually capped at $450,000–$500,000 for the full rebate).

When final legislation is set, buyers who meet qualifications might save on average between $15,000 and $25,000.

Boosting Housing Supply, Too

This initiative is part of the government’s overall housing strategy, which includes:

Making new purpose-built rental buildings GST-free
Investments of federal funds in affordable housing projects
Suggesting that provinces create stronger incentives

With GST reductions, the government wants to support buyers and also push more people to buy newly built homes, which can help finish projects quicker and address shortages.

Final Thoughts:

This GST relief makes a big difference for anyone buying a home for the first time. You can buy a home sooner, start saving right away and now many more Canadians feel confident about entering the homeownership market.

If you think you may need to buy a new home, it’s smart to try consulting a mortgage or real estate specialist right now and find out what you might be eligible for. If you organise your plans, you might find that this is the best time to own your own home.