Canada’s New $50,000 GST Rebate for First-Time Home Buyers Clears the Senate

Canada is one step closer to introducing a major housing affordability measure that could significantly reduce the cost of buying a newly built home.

On February 26, 2026, Bill C-4 – the Making Life More Affordable for Canadians Act – passed third reading in the Senate, marking another key step toward becoming law. The bill now returns to the House of Commons to review Senate amendments before receiving Royal Assent.

If finalized, the measure would allow eligible first-time home buyers to recover up to $50,000 in federal GST when purchasing a newly built home.

What the Proposed GST Rebate Includes

The legislation would amend the Excise Tax Act to introduce an enhanced GST rebate for first-time buyers purchasing new construction or substantially renovated homes.

Key features include:

• Removal of the 5% federal GST on qualifying new homes

• Maximum rebate of $50,000

• Full rebate available on homes priced up to $1 million

• Partial rebate between $1 million and $1.5 million

• No rebate available above $1.5 million

This represents a significant increase from the current federal new housing rebate, which is capped at $6,300.

For example, a first-time buyer purchasing a $1.25 million newly built home would receive roughly half of the maximum rebate, or about $25,000, since that price sits in the middle of the phase-out range.

Timeline and Eligibility

An amendment to the bill backdated eligibility for certain buyers.

To qualify:

• The purchase agreement must be signed after March 19, 2025

• Construction must begin before 2031

• The home must be substantially completed before 2036

Buyers must also:

• Be at least 18 years old

• Be a Canadian citizen or permanent resident

• Not have owned a home in the previous four years

• Use the property as their primary residence

Eligible properties include detached homes, semi-detached homes, townhouses, condos, modular homes, and floating homes. Resale properties that have not been substantially renovated do not qualify.

How This Works in Ontario

Ontario already provides a provincial new housing rebate of up to $24,000 for eligible buyers. While there has been discussion about expanding provincial incentives, no additional provincial legislation has been passed yet.

If Bill C-4 receives Royal Assent, the Canada Revenue Agency will release updated guidance and forms, and the rebate will typically be applied for after closing or credited by the builder at closing.

What This Could Mean for the Housing Market

The enhanced rebate is expected to primarily benefit the new construction market, particularly in higher-cost regions such as Ontario and the GTA.

Potential impacts could include:

• Improved affordability for first-time buyers

• Increased demand for newly built homes

• Greater confidence in the pre-construction market

However, because the rebate only applies to new construction, the resale housing market will not benefit directly.

Source: Ontario Housing Market