In my article from March, 2025 here, I discussed potential election promises on GST/HST cuts from both the Liberals and Conservatives. As a reminder, in Ontario pre-construction homes are subject to HST (Harmonized Sales Tax), which is a combination of the federal Goods and Services Tax (GST) at 5% and the provincial sales tax (PST) at 8%, totaling 13%.
Mark Carney's new Canadian government tabled legislative proposals to the Excise Tax Act on May 27, 2025 to reduce or eliminate the GST portion for First-Time Home Buyers on new homes purchased from a builder (the "FTHB GST Rebate").
Eligibility Criteria to be considered a First-Time Home Buyer and eligible for the FTHB GST Rebate include:
- You must be over the age of 18;
- You must be a Canadian citizen or Permanent Resident of Canada;
- You cannot have lived in a home that you or a spouse/common-law partner owned in the five years preceding the purchase of the new home;
- Similar to the existing HST Residential Rebate program, you must move in to the property to make it your primary place of residence;
- You will only be permitted to claim one FTHB GST Rebate per lifetime, and would not be permitted to claim if your spouse or common-law partner previously claimed the FTHB GST Rebate.
The Rebate structure is as follows:
- The large majority of builders in Ontario will presume that
each purchaser will live in the property as their primary place of
residence, and therefore already reduce the purchase price by the
existing combined Federal and Provincial HST Residential Rebate
amount to show a sticker purchase price on the Agreement of
Purchase and Sale;
- Up to a purchase price of $1 million the new FTHB GST Rebate,
in combination with the existing HST Residential Rebate, will
result in a rebate of 100% of the GST;
- For new homes purchased between $1 million and $1.5 million,
the FTHB GST Rebate will be phased out in a linear manner. For
example, a home valued at $1.25 million will be eligible for a 50%
GST Rebate, valued at up to $25,000;
- The government states that the maximum FTHB GST Rebate would be $50,000, but as of the date of this article we await further information on the formula for calculating the Rebate as to be reflected in changes to the Excise Tax Act.
Applicable properties:
- New homes purchased from a builder;
- Certain owner-built homes;
- Certain purchases of shares of a cooperative housing corporation (co-op).
Timeline for new homes purchased from a builder:
- The APS must be signed on or after May 27, 2025 and before 2031;
- Construction of the home must begin before 2031 and be substantially completed before 2036;
- Unfortunately these changes are not retroactive against Agreements of Purchase and Sale (APS) that were signed with a builder prior to May 27, 2025;
- The FTHB GST Rebate will not be retroactive against any Assignment purchases where the original APS was signed prior to May 27, 2025, but where the assignment is completed after this date; and
- The FTHB GST Rebate may be disallowed if an existing APS signed prior to May 27, 2025 is cancelled, re-signed or substantially varied or altered in an attempt to qualify.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
