In a move designed to ease the financial burden of homeownership and encourage new residential construction, the Canadian government has introduced a new Goods and Services Tax (GST) rebate exclusively for first-time home buyers purchasing newly built homes. The First-Time Home Buyer (FTHB) GST Rebate was announced on May 27, 2025, and is part of a broader strategy to make housing more accessible while stimulating housing development across the country.

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What the New GST Rebate Means for First-Time Buyers

For the first time, eligible buyers can now recover up to 100% of the GST paid on new homes priced up to $1 million. For new homes priced between $1 million and $1.5 million, a partial rebate is available on a sliding scale. No rebate is available for homes valued at or above $1.5 million.

This means a first-time home buyer purchasing a brand-new $900,000 home could save up to $50,000—a substantial reduction in the upfront cost of homeownership.

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Who Is Eligible?

To qualify, a buyer must meet all of the following:

• Be at least 18 years old;
• Be a Canadian citizen or permanent resident;
• Not have owned (or lived in a home owned by a spouse or partner) during the current calendar year or the past four years.

This program is available to individuals purchasing directly from a builder, constructing their own home, or purchasing a share in a cooperative housing project—as long as the home is intended to be their primary residence and they are the first occupant.

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Timeline and Purchase Conditions

This rebate applies to homes that meet the following conditions:

• The purchase agreement is signed on or after May 27, 2025, and before 2031;
• Construction must begin before 2031 and be substantially completed before 2036.

For owner-built homes, the same construction deadlines apply.

It’s important to note: if a new home is purchased through an assignment sale, and the original agreement was signed before May 27, 2025, the rebate will not apply. Buyers looking to benefit from this program must ensure they are entering a brand-new contract within the approved timeline.

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How It Works

The rebate follows a linear phase-out between $1 million and $1.5 million. For instance:

• At $1 million: 100% of the GST can be rebated (up to $50,000).
• At $1.25 million: 50% rebate (up to $25,000).
• At $1.5 million: 0% rebate.

This sliding scale approach ensures the greatest benefit goes to buyers of modestly priced new homes, while still offering partial relief for higher-value purchases within the eligibility range.

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Special Note on Co-Op Housing

Buyers investing in cooperative housing shares are also eligible, provided the co-op paid GST on the new build. As with other purchase types, the unit must serve as the buyer's principal residence, and they must be the first person to live there.

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One-Time Use Only

The FTHB GST Rebate can only be used once per individual or household. If your spouse or common-law partner has already claimed it, you won’t be eligible—even if you're buying your own home separately.

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What This Means for Buyers in the Okanagan

With new developments underway in Kelowna, West Kelowna, Lake Country, and beyond, this rebate presents a valuable opportunity for first-time buyers to enter the market sooner and with more financial flexibility. For example, buyers interested in a pre-construction condo or townhome could apply this rebate directly to reduce closing costs or reinvest the savings into upgrades or furnishing.

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Final Thoughts

The FTHB GST Rebate is a targeted financial incentive with the potential to make a meaningful difference for Canadians trying to buy their first home. It also creates a timely advantage for developers and builders, offering increased demand in the new home market. If you're a first-time buyer planning to purchase or build a new home in the next few years, now is the time to explore your options and speak with your real estate advisor.

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At Coldwell Banker Horizon Realty, we’re here to help you navigate your home buying journey. Reach out today to learn how this new rebate could work for you and which new developments across the Okanagan qualify.

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Source: Gov of Canada