Now that the Mark Carney version of the Trudeau government has been installed and the pomp and circumstance of opening Parliament is out of the way, it’s time to focus on one of Carney’s campaign promises: The First-Time Home Buyers' (FTHB) GST rebate on purchases of new homes priced under $1 million. The Liberals claim the rebate will save first-time buyers up to $50,000 and have extended the program to include homes priced between $1 million and $1.5 million that will see a reduction of 50% of the GST, saving $25,000 for FTHBs. A new government release details who qualifies for the rebate, and who doesn't. Who qualifies To qualify, first-time homebuyers must be 18 years of age or older; be Canadian citizens or permanent residents and; have not lived in a home that they or their spouse or common-law partner owned in the calendar year or in the four preceding calendar years, both inside and outside of Canada. At least one of the purchasers needs to be a ‘first-time home buyer’ (as defined by the government). The home must be the primary residence and cannot have been occupied by a previous owner. .Buyers who purchase a new home from a builder, build or hire a builder to build a home on land they own or lease, or purchase shares of a co-operative housing corporation are all eligible. The rebate is available on new home purchases finalized before 2031. Construction of the home must start before 2031 and be completed or near completion prior to 2036. People building their own first home, or hiring a builder would recover up to $50,000 of the GST or the federal part of the HST paid to build the home. When purchasing a new co-op housing unit, first-time homebuyers can claim the rebate in respect of the purchase of the unit where the co-op paid GST or the federal part of the HST in respect of new housing. For this option, the FTHB GST rebate would not be available if the co-op housing is eligible for the existing 100% GST rebate for purpose-built rental housing. Who doesn’t qualify The rebate can't be claimed more than once in an individual's lifetime and cannot be claimed if a spouse or common-law partner previously claimed the rebate. .In the case of a sale of a property before construction completes, if a first-time home buyer assumes the rights and obligations of another person that is a purchaser of a new home under an agreement of purchase and sale with a builder, the FTHB rebate would not be available if that original agreement of purchase and sale was entered into before May 27, 2025. If an agreement of purchase and sale for a new home is later cancelled and a new sales agreement is entered into the rebate may be disallowed. Builders speak outThe policy is designed to increase new home construction and make ownership easier for first-time buyers, and any attempt that actually attacks the ‘housing crisis’ is the right thing to do. However, home-building industry executives say the Liberals plan could go further, including expanding the eligibility. In a statement, Justin Sherwood, senior vice-president of communications, research and stakeholder relations for the Building Industry and Land Development (BILD) said, "Unfortunately, this limitation to first-time buyers only will have a very small impact, as very few new home buyers are first-time buyers.” .“It will not substantially help address affordability, nor will it help significantly stimulate sales and construction. The government has reaped billions in additional tax revenue on new homes by not indexing GST price rebate thresholds since 1991 and instead has created a new mechanism that will apply to very few purchasers.” “In order to have maximum impact and address the effects of GST/HST on eroding home affordability, the Federal government must broaden the scope of the GST (HST) measures to all new home purchases.” In a press release, Canadian Home Builders Association CEO, Kevin Lee said, “While the quick action to move on the FTHB GST rebate is welcome as it will go a long way to enable first-time home buyers to access homeownership, the housing supply gap is still widening.” “We still urge the federal government to extend this measure to all home buyers and reconsider the eligibility to make it based on closing date, not date of purchase and sale.”
