Canadian and Design Construction writer
The House of Commons has passed Bill C-4, Making Life More Affordable for Canadians Act, which includes the First-Time Home Buyers’ GST Rebate.
It’s a move that the Residential Construction Council of Ontario (RESCON) calls a significant step toward improving housing affordability and stimulating new home construction.
The legislation, which received Royal Assent on March 12 eliminates the five per cent federal Goods and Services Tax (GST) on newly built homes priced at $1 million or less for eligible first-time buyers, and reduces it on homes between $1 million and $1.5 million.
“While it took a long time to get here, the passage of Bill C-4 is extremely welcome news,” said RESCON president Richard Lyall. “Eliminating the GST for first-time buyers on new homes will make a meaningful difference for purchasers and help revive the new home market which has suffered greatly over the past couple of years. This has the potential to kick-start much-needed residential construction.”
However, not everyone was satisfied with the first-time-buyer focus.
Conservative MPs argued that restricting the GST cut to first-time buyers leaves out the majority of new home purchasers and they repeatedly called for the GST to be eliminated on all new homes priced under $1.3 million to stimulate housing starts.
During House of Commons debates, Conservative members described the Liberal plan as “restrictive” and said it would have minimal impact on housing supply.
Conservative Leader Pierre Poilievre campaigned last year on axing the GST on a wider range of new homes, arguing it could save buyers tens of thousands and boost residential
Under the new rules:
- Eligible first-time buyers pay no federal GST on homes up to $1 million.
- Partial rebates apply to homes between $1 million and $1.5 million.
- Potential savings reach approximately $50,000 for qualifying buyers.
Rebates come at a critical time, as Ontario’s housing sector faces declining housing starts, softer new home sales, and mounting job losses.
“Projects are being shelved, sales have stalled, and job losses are mounting across the industry,” said Lyall.
Provincial governments have also aligned with the federal rebate. In Ontario, first-time buyers may qualify for provincial HST relief, potentially combining federal and provincial rebates for a total tax cut of 13 per cent on a new home.
