⚠️ Not Yet In Effect
What Changed — The Old Rebate vs. the New Exemption
For years, the federal GST New Home Rebate helped first-time buyers — but only barely. The rebate maxed out at $6,300 and disappeared entirely for homes priced above $450,000. In a market like Metro Vancouver or the Fraser Valley, where most new builds cost $600,000 to $1,000,000+, the rebate was essentially irrelevant to the majority of buyers.
The new legislation changes everything. Instead of a small, means-tested rebate, it introduces a full GST exemption for first-time buyers on newly built homes — eliminating the GST entirely, up to a maximum saving of $50,000 on a $1,000,000 home.
Key Takeaway
| Feature | Old GST New Home Rebate | New GST Exemption (Pending) |
|---|---|---|
| Type | Partial rebate (refund after) | Full exemption (never charged) |
| Maximum savings | $6,300 | $50,000 |
| Full benefit threshold | $350,000 or less | $1,000,000 or less |
| Phases out at | $450,000 — no rebate above | No phase-out: all or nothing |
| Who qualifies | Any new home buyer | First-time buyers only |
| Applies to | New construction only | New construction only |
| Status | Active | Awaiting Royal Assent |
How Much You Can Save (Projected)
The exemption eliminates 5% GST on the full purchase price of the home, up to a maximum saving of $50,000 (capped at a $1,000,000 purchase price). Here's what that looks like at common new build price points in BC — once the legislation comes into force:
| Purchase Price | Old Rebate (max) | New Exemption Saving | Net GST Payable |
|---|---|---|---|
| $500,000 | $0 (above $450K) | $25,000 | $0 |
| $600,000 | $0 (above $450K) | $30,000 | $0 |
| $700,000 | $0 (above $450K) | $35,000 | $0 |
| $800,000 | $0 (above $450K) | $40,000 | $0 |
| $900,000 | $0 (above $450K) | $45,000 | $0 |
| $1,000,000 | $0 (above $450K) | $50,000 (max) | $0 |
💡 Resale Homes Are Still GST-Exempt
Estimate Your GST Savings
Use the GST calculator to see how much the new exemption could save you at your target purchase price.
Who Qualifies
Based on the legislation as passed, the GST exemption is intended for buyers who meet all of the following criteria:
- First-time buyers — you must not have previously owned a qualifying residential property in Canada.
- New construction only — the property must be a newly built home sold for the first time, a presale condo, or a substantially renovated home.
- Price cap of $1,000,000 — the full exemption applies to homes priced at $1,000,000 or less. Homes above this threshold do not qualify.
- Primary residence — the home must be purchased for use as your primary place of residence, not as a rental or investment property.
- Canadian buyer — consistent with other federal housing programs, the exemption is expected to apply to Canadian citizens and permanent residents.
⚠️ Final Eligibility Rules Not Yet Published
When It Takes Effect
Understanding where this legislation sits in the Canadian legislative process is important — especially if you're planning a new home purchase in 2026.
| Legislative Step | Status |
|---|---|
| Introduced in Parliament | ✓ Complete |
| Passed the House of Commons | ✓ Complete |
| Cleared the Senate | ✓ Complete (February 2026) |
| Royal Assent | ⏳ Pending |
| In-force date announced | ⏳ Not yet announced |
Royal Assent is the final step before a bill becomes law in Canada — it is granted by the Governor General on behalf of the Crown. After Royal Assent, the government will also need to announce the official in-force date — the date from which buyers can actually rely on the exemption at closing.
✅ Prepare Now — Don't Wait
How to Claim It
Once the legislation is in force, the process for claiming the GST exemption will likely work similarly to how builders currently handle the GST New Home Rebate — except the saving will be far larger:
- Notify your builder early — Tell the builder you're a first-time buyer when signing the purchase agreement. They will need to confirm your eligibility before closing.
- Sign a declaration — You'll likely need to sign a statutory declaration confirming you are a first-time buyer and that the property will be your primary residence.
- Builder does not charge GST — If you qualify, the builder simply won't charge GST on the purchase — no GST collected, no rebate application needed.
- CRA backup process — If a builder charges GST and you later establish that you qualified for the exemption, you should be able to claim a refund directly with the CRA within 2 years. The exact form is TBD once rules are finalized.
💡 Final CRA Process Not Yet Published
Stack It With Other First-Time Buyer Incentives
The new GST exemption doesn't replace other first-time buyer programs — it stacks on top of them. For a first-time buyer purchasing a $900,000 new build in BC, here's what a combined incentive picture looks like once the new legislation is in force:
| Incentive | Projected Benefit | Type |
|---|---|---|
| New GST exemption (pending Royal Assent) | $45,000 saved | Direct cash saving at closing |
| Newly built home PTT exemption | $16,000 saved | Direct cash saving at closing |
| First Home Savings Account (FHSA) | $40,000 accessible | Tax-advantaged down payment |
| RRSP Home Buyers' Plan (HBP) | $60,000 accessible | Tax-advantaged down payment |
| First-Time Home Buyers' Tax Credit | $1,500 refund | Federal tax return |
That's a potential $62,500 in direct cash savings at closing (GST + PTT + HBTC) — plus access to $100,000 in tax-advantaged savings toward your down payment through the FHSA and RRSP HBP.
⚠️ All Subject to Individual Qualification
For a full breakdown of all first-time buyer incentives available today, see my guide on First-Time Home Buyer Incentives in BC.