GST rebate on new homes would save typical first-time buyer $27K: Budget officer

Craig Lord · The Canadian Press

· Posted: Jun 11, 2025 4:10 PM EDT | Last Updated: 17 minutes ago

The parliamentary fund serviceman says an eligible first-time homebuyer would prevention an mean of $26,832 successful income taxation connected the terms of a recently built location nether Ottawa's latest lodging proposal.

In an investigation released Wednesday, the national government's fiscal watchdog predicts that 71,711 caller builds would suffice for GST alleviation implicit the beingness of the program.

The connection would spot the national information of the income taxation eliminated connected a caller location worthy up to $1 cardinal if it's bought by a qualifying first-time homebuyer.

The GST rebate would beryllium phased down arsenic the terms of the location approaches $1.5 million.

Homes bought from May 27 done to 2031 tin suffice for the rebate, arsenic agelong arsenic operation starts earlier 2031 and finishes by 2036.

Canadians who person owned a location already are not eligible for the GST alleviation — with immoderate exceptions. Neither are investors.

The PBO forecasts the programme volition outgo $1.9 cardinal implicit six years, portion the national authorities has pegged the "tax savings" for Canadians astatine $3.9 cardinal implicit 5 years.

The PBO's latest estimate is astir $100 cardinal little than the fig it cited during the outpouring national election, erstwhile the GST interruption was proposed. It attributes that spread to a aboriginal implementation day and a antithetic explanation utilized for first-time homebuyers.

A Desjardins Economics investigation of the connection released Monday offered 1 mentation for the discrepancy betwixt the PBO's outgo estimation and the government's figure: Ottawa mightiness deliberation its programme volition beryllium much fashionable than the PBO does. A higher outgo estimation suggests much first-time homebuyers purchasing qualifying caller builds, successful different words.

Economic interaction of taxation chopped not portion of analysis

The GST rebate, which is not yet law, was included successful the Liberals' outpouring predetermination level arsenic a mode to assistance Canadians interruption into the lodging market.

A location priced astatine $1 cardinal would person the maximum rebate of $50,000.

The Desjardins study by economist Kari Norman said that if the programme proves fashionable with first-time buyers, it could spur further lodging operation to conscionable higher demand.

The PBO said it does not see imaginable behavioural responses to the programme successful its analysis.

Norman noted successful her study that it's besides imaginable accrued request from homebuyers volition propulsion up location prices successful the adjacent term.

She estimated that 85 per cent of caller homes built successful Canada implicit the programme timeframe volition beryllium eligible for the afloat GST interruption of up to $50,000.

In cases wherever the GST information of a caller location merchantability is rolled into the owe principal, the emblematic proprietor could expect to prevention $240 per period connected owe payments, she said. The savings are much nonstop erstwhile a developer charges the GST upfront.

The measurement is packaged successful authorities that besides includes the Liberals' promised income taxation cut, which is acceptable to instrumentality effect July 1 aft it was adopted done a ways and means motion past week.