GST Relief for First-Time Home Buyers on New Homes Up to $1.5 Million – What You Need to Know

On May 27, 2025, the Government of Canada announced a major update to its housing affordability strategy—first-time home buyers can now receive full GST relief on newly constructed homes priced up to $1.5 million. This is a substantial increase from the previous threshold of $450,000 and comes at a time when affordability remains a significant concern across the country.

If you're entering the housing market for the first time, this new measure could make a meaningful difference in your buying power. Let’s break down what this means, how it works, and why the Terry Paranych Real Estate Group is here to help you navigate the market with confidence.

What Is the GST Relief Program?

The Goods and Services Tax (GST) is a 5% federal tax applied to the purchase of new homes in Canada. Historically, a partial rebate was available to first-time home buyers, but only on homes priced under $450,000. With average home prices rising well above that threshold—especially in cities like Edmonton, Calgary, and Vancouver—many buyers were effectively excluded from this benefit.

As of 2025, the new policy allows a full 5% GST rebate on newly constructed homes valued up to $1.5 million, with the following key highlights:

• 100% GST relief for homes under $1.5 million
• Applies to newly built homes, including single-family homes, condos, and townhomes
• Available to first-time home buyers only
• Applies to both owner-occupied homes and purpose-built rental housing projects

Who Qualifies for This Rebate?

To be eligible for the full GST relief, buyers must meet the following criteria:

• Be a first-time home buyer (you have not owned a home or had a stake in one in the last four years)
• Purchase a newly constructed or substantially renovated home
• The home must be valued at $1.5 million or less
• The buyer must intend to use the home as their primary place of residence

This update will significantly improve affordability and accessibility for middle-income Canadians and younger buyers entering the market.

How Much Could You Save?

Let’s look at a quick example. If you’re buying a new home priced at $700,000, the 5% GST would normally cost you $35,000.

Under the new GST relief program, you’d save the full $35,000—a major financial advantage that could go toward closing costs, home improvements, or even reducing your mortgage amount.

Here's a rough breakdown of savings at different price points:

Note: Homes priced over $1.5 million are not eligible for any GST relief under this new program.

Why This Matters for Edmonton Real Estate

For buyers in Edmonton, this is a particularly exciting development. While prices here are generally more affordable compared to other major Canadian cities, many new builds—especially in desirable neighbourhoods—can exceed $450,000.

This updated rebate ensures more buyers can now access brand-new homes without the extra tax burden, making Edmonton’s growing suburbs and infill communities more attractive and attainable.

It also encourages developers to build more entry-level and mid-range housing, now that more of these homes will qualify for the GST rebate. That could increase inventory and provide more options for buyers.

How the Terry Paranych Real Estate Group Can Help

Navigating new government programs and incentives can be overwhelming, especially when you're already juggling mortgage approvals, home tours, and negotiations. That’s where we come in.

Here's how our team can support you:

• Identify properties that qualify under the new GST rebate rules
• Connect you with trusted builders and developers in Edmonton
• Help you understand your financial eligibility and maximize incentives
• Guide you through the entire buying process, from offer to closing

Whether you're looking at a custom home in Windermere, a modern duplex in Glenora, or a new condo downtown, our team has the expertise and local market knowledge to help you take full advantage of this rebate.

Key Takeaways

To recap, here’s what you need to remember:

• First-time home buyers can now get full GST relief on new homes valued up to $1.5 million
• This change applies to new construction only
• Buyers can potentially save up to $75,000
• The policy aims to boost affordability and increase housing supply
• Edmonton buyers stand to benefit from more accessible new home options

FAQs

Q: Does this apply to resale homes?
A: No, the GST rebate only applies to newly constructed homes, not existing (resale) properties.

Q: Can I still get the rebate if I co-purchase with someone who already owns a home?
A: Generally, both buyers must be first-time buyers to qualify. However, there may be exceptions based on how ownership is structured. Consult a real estate professional or tax advisor.

Q: When does the GST relief take effect?
A: The government announced this policy in May 2025. It's effective immediately for qualifying purchases and construction.

Q: Are there other programs I can combine with this rebate?
A: Yes! You may still qualify for the First-Time Home Buyer Incentive, Home Buyers' Plan (RRSP withdrawal), and provincial grants depending on where you live.

Moving Forward

This new GST relief is a major win for Canadians looking to enter the housing market. If you're considering buying a new home in Edmonton, this could be the perfect time to make your move.

At the Terry Paranych Real Estate Group, we’re here to help you understand your options, maximize your benefits, and find the right home—without added stress or confusion.

Thinking about taking the first step toward homeownership?
Contact us today to schedule a free consultation and explore new builds that qualify for the GST rebate.