Before this rebate came into effect, the GST rebate for new homes only applied in full if the home cost $350,000 or less. Once the price hit $450,000, the rebate still applied. In today’s market, those price limits are no longer practical, especially in Ontario where even basic townhomes were selling for more than $450,000.

This update now addresses that reality.

With the new rebate, first-time homebuyers can receive a full rebate on the 5% federal GST for newly constructed homes priced up to $1.5 million. The goal is simple: reduce the upfront tax burden and help more Canadians take the first step into homeownership.

Here’s what you need to know:

• You must be a first-time homebuyer
• The home must be newly built and intended to be your primary residence.
• The purchase price must be $1.5 million or less.
• You’ll still need to meet all the standard eligibility rules under the existing GST New Housing Rebate program.

If your new home falls into this category, you could be looking at savings of up to $75,000. This is not a small amount, especially at a time when closing costs, interest rates, and everyday expenses continue to chip away at the home affordability crisis.

Yes, this applies to pre-construction purchases as well, as long as the agreement of purchase and sale was signed on or after May 7, 2025, and the home will be your primary residence.

For years, many first-time homebuyers felt that government incentives weren’t reflective of the real estate market. This change validates what agents and buyers have been saying for a long time: starter homes today don’t look like they did 20 years ago, and neither should the rules.

By raising the limit to $1.5 million, the government is acknowledging current market prices, especially in high-demand areas like the GTA. For many first-time buyers, this could mean the difference between continuing to rent or finally owning a home.

If you’re planning to buy a new home, whether resale or a pre-construction property, it’s worth taking a closer look at how this new GST relief could affect your bottom line.

If you’re not sure where to begin, RE/MAX Team Paliwal can walk you through what this means for your personal situation and help you compare properties that fall into your budget.

Contact us for a free, no-obligation buyer consultation in person or virtually over Zoom.