The $50,000 first-time buyer GST rebate is law — and it's retroactive to March 2025
The FTHB GST Rebate wipes the federal GST off a new home up to $1 million. Here's who qualifies, how the phase-out works, why some 2025 buyers can still claim it, and how it stacks with Ontario's new relief.
Most housing measures shave a few basis points off a mortgage. This one removes a five-figure closing cost — and a lot of eligible buyers still don't know they can claim it retroactively.
What the rebate does
Bill C-4 received Royal Assent on March 12, 2026, creating the First-Time Home Buyers' GST Rebate. It refunds the GST (or the federal 5% part of HST) on a newly built home:
- 100% of the GST on a new home valued up to $1 million — a maximum rebate of $50,000.
- A linear phase-out between $1 million and $1.5 million. Finance Canada's own example: a $1.25 million home qualifies for a 50% rebate, up to $25,000.
- Nothing at $1.5 million or above.
Critically, the enacted version is retroactive: it applies where the agreement of purchase and sale was entered into on or after March 20, 2025 and before 2031, with construction starting before 2031 and substantially complete before 2036.
Builders couldn't credit the rebate at closing until Royal Assent. If you closed on a qualifying new home in 2025 or early 2026 and paid the GST, you can apply to the CRA directly.
Who counts as a first-time buyer
The test is stricter than most people assume. You generally need to:
- Be at least 18, and a Canadian citizen or permanent resident;
- Not have lived in, as your primary residence, a home that you or your spouse/common-law partner owned — in Canada or anywhere else — in the calendar year of the purchase or the four calendar years before it;
- Buy it as your primary residence and be the first person to occupy it.
Note the wording: the test is about a home you lived in as your principal residence, not any property you've ever held. A rental you owned but never occupied doesn't automatically disqualify you.
Two more limits that catch couples off guard: the rebate is once per lifetime, and you can't claim it if your spouse already has.
What it doesn't cover
- Resale homes. You need a new home from a builder, an owner-built home, or a co-op share — though a substantially renovated home (essentially gutted to the studs) also counts.
- Re-papered older deals. Varying, assigning, or cancelling and re-signing a pre-May 27, 2025 agreement to qualify is specifically blocked.
Ontario buyers: this stacks
The federal rebate covers the 5% GST, or the federal part of HST. In Ontario, three provincial measures now sit on top of it — so the $50,000 headline understates what an Ontario first-time buyer can reach:
- An Ontario first-time buyer rebate of up to $80,000 of the 8% provincial part, following the same eligibility conditions as the federal one.
- The Enhanced New Housing Rebate, up to $80,000 and open to all buyers — not just first-timers — on agreements signed between April 1, 2026 and March 31, 2027.
- The New Home Affordability Payment, which tops up the federal 5% portion (up to $50,000), reduced by any federal rebate you claim.
Stacked, an Ontario first-time buyer on a qualifying new build can be looking at six figures of tax relief. Check the current provincial rules — these are new, and several have hard end dates.
How to claim it
- Buying from a builder: the builder can credit the rebate at closing on form GST190 — the cleanest route, since you never front the cash. In Ontario, RC7190-ON goes with it for the provincial part.
- Already closed, or the builder didn't credit it: file GST190 with the CRA yourself. Builders couldn't credit anything before Royal Assent, so this is the normal path for 2025 and early-2026 closings.
- Owner-built: file GST191 with the GST191-WS construction summary (plus RC7191-ON in Ontario).
You generally have two years to file — measured from transfer of ownership when you buy from a builder, or from a base date tied to substantial completion for an owner-built home.
What $50,000 actually buys you
It isn't a discount on the purchase price — it's cash that stays in your pocket at closing. Redirected into the down payment on a $900,000 new build, $45,000 moves you from 15% down to 20% — enough to drop mortgage default insurance premiums entirely. Run your own version with the down payment savings calculator, then check what the resulting mortgage does to your budget with the home affordability calculator.
The takeaway
The eligibility window is narrow — new builds, first-time buyers, under $1.5 million — but inside it, this is the largest single closing-cost break available to Canadian buyers, and in Ontario it now stacks with provincial relief. Because it reaches back to March 20, 2025, the people most likely to miss it are the ones who already bought.