** This information is for example purposes only. ALWAYS make sure to speak with your professional accountant regarding any tax related questions. Do NOT Rely on the information on this page as tax advice. **
If you're purchasing a $1,400,000 new home and qualify as a first-time home buyer, here’s how the GST rebate calculates under the federal program:
How the rebate works
- GST charged on a $1.4 M home (5%) = $70,000 total GST.
- Maximum rebate cap = $50,000.
- Phase-out applies between $1M and $1.5M:
- This range spans $500,000.
- Your home exceeds the $1M threshold by $400,000.
- Remaining in the rebate zone: $100,000 (since 1.5 M − 1.4 M = $0.1M).
- Phase-out ratio = $100,000 / $500,000 = 0.2 (20%).
- Rebate received = 20% of the max $50,000 rebate = $10,000.
Summary Table
| Home Price | Phase-out Factor | Rebate Amount |
|---|---|---|
| $1,400,000 | 0.20 | $10,000 |
The final rebate you'll receive is $10,000 — meaning you'll pay a net GST of $60,000.
Why this makes sense
- Homes up to $1M get a full rebate (5% GST on full price) → $50K cap applies.
- Between $1M–$1.5M, the rebate phases out linearly — your home is 80% of the way through the phase-out, so you get 20% of the full rebate.
(canada.ca, distribution-a617274656661637473.pbo-dpb.ca )
Yes—I’m aware of this. As of May 27, 2025, the Canadian federal government introduced a first-time home buyers’ GST rebate under Bill C‑56 (the Affordable Housing and Groceries Act). Here’s the breakdown:
What it covers
- New homes (including builder-purchased, owner-built, or co-op shares).
- Effective date: agreements signed on or after May 27, 2025 and before 2031, with construction timelines extending to 2036 (canada.ca).
Rebate structure
| Home Price | Federal GST Rebate |
|---|---|
| ≤ $1 million | 100% GST/HST rebate — up to ~$50,000 |
| $1 million–$1.5 million | Phased-out linearly — e.g., $1.25 M home gets |
| ≥ $1.5 million | No rebate (canada.ca, pwc.com) |
Eligibility criteria
To qualify, you must:
- Be a Canadian citizen or permanent resident, aged 18+.
- Be a first-time homebuyer, meaning neither you nor your spouse/common-law partner owned and lived in a home in the current or four preceding calendar years (canada.ca).
- Use the home as your primary residence, and be its first occupant (canada.ca).
Additional notes
- The maximum rebate is $50,000, whether purchasing from a builder, building yourself, or joining a co‑op (canada.ca).
- It’s a one-time per-person credit, and if your spouse has already claimed it, you’re ineligible.
- Sales agreement must be entered into on or after May 27, 2025. If re-signing or reassigning due to an earlier contract, you could lose eligibility (canada.ca, pwc.com).
- This rebate applies to the federal portion of GST/HST only; provinces with HST haven’t necessarily matched provincial components yet (pwc.com).
