What Is the New GST Rebate for First-Time Buyers?
First-time home buyers in Toronto have a new reason to celebrate. On May 27, 2025, the federal government introduced the First-Time Home Buyers’ GST Rebate. A major incentive aimed at easing the burden of homeownership and boosting new housing construction. This GST rebate for first-time buyers could result in tax savings of up to $50,000 on eligible new home purchases.
This measure applies to new homes purchased from a builder, owner-built homes, and cooperative housing units, offering a 100% GST rebate for new homes up to $1 million. Subsequently, for homes valued between $1 million and $1.5 million, the rebate is phased out proportionally.
How Much Can You Save?
Eligible first-time buyers in East Toronto and across the GTA can save significantly under the new rebate:
- 100% GST rebate (up to $50,000) for homes up to $1 million
- Phased-out rebate between $1 million and $1.5 million (e.g., a $1.25 million home = ~$25,000 rebate)
- No rebate for homes $1.5 million or more
This rebate applies to agreements signed on or after May 27, 2025, and before 2031. Additionally, the construction of the cooperative housing must begin before 2031 and be substantially completed before 2036.
Who Qualifies for the FTHB GST Rebate?
To qualify, at least one buyer must:
- Be 18 years or older
- Be a Canadian citizen or permanent resident
- Not have owned or lived in a home they (or their partner) owned in the past 4 years
The rebate can only be claimed once in a lifetime and cannot be claimed if your spouse or common-law partner has already used it.
What Types of Homes Are Covered?
The GST relief for first-time buyers applies to:
- Newly built homes from a builder
- Owner-built homes on owned or leased land
- Shares in a co-op housing corporation
Additionally, to qualify, the home must serve as your primary residence, and you must be the first occupant.
For more on how this differs from the existing GST/HST New Housing Rebate, check out the CRA’s guide.
What This Means for East Toronto Real Estate
This GST rebate is expected to fuel demand for new homes in neighbourhoods like The Beaches, Danforth Village, and Scarborough Bluffs, where new developments are already gaining attention.
This measure also encourages builders to focus on mid-market homes under the $1.5 million mark, where demand from young professionals and families continues to rise.
For more ways to take advantage of first-time buyer programs in East Toronto, read our post on top first-time buyer incentives in Ontario.
Final Thoughts: Should You Act Now?
If you’re planning to buy or build a new home in East Toronto, the GST relief for first-time buyers offers a major financial incentive. With savings of up to $50,000, this could be your best opportunity to step into the housing market.
