We’re getting a lot of questions about the new First-Time Home Buyers’ GST rebate. Most of them come down to one thing: how does the rebate actually work when you’re buying a home?
We’ve had a chance to review how this is being administered in practice, and the process closely mirrors the existing GST/HST New Housing Rebate framework.
Here’s what buyers should know.
How the Rebate Is Claimed
In practice, there are two possible mechanisms, depending on how the purchase agreement is structured.
1. Builder Credit at Closing (Most Common)
Where the purchase agreement allows for it, the builder credits the estimated rebate amount on closing.
- The buyer assigns the rebate to the builder
- The builder files the rebate application with the CRA
This is already how most GST/HST new housing rebates are handled, and current guidance suggests this will be the standard approach here as well.
2. Buyer Applies After Closing
If the builder does not credit the rebate on closing, the buyer can apply directly to the CRA after taking possession.
- The buyer submits the prescribed rebate forms
- The CRA processes the application and pays the rebate to the buyer
This is handled as a standalone GST rebate application.
What the Rebate Is Not
There are a few common misunderstandings:
- It is not claimed at tax filing time on your T1 return
- It is not automatically handled at a lawyer’s office, unless the builder credit is built into the closing statement
- It is a separate rebate process through the CRA
What Buyers Should Expect
In most cases, the rebate will be addressed directly in the purchase contract with the builder.
If it is not explicitly credited on closing, buyers should confirm:
- Whether they or the builder will submit the rebate application
- When the rebate will be applied or paid
Additional Background
According to the Canada Revenue Agency, the rebate is available to eligible first-time home buyers who purchase or build a new or substantially renovated home.
The rebate allows buyers to recover all or part of the GST (or the federal portion of the HST) paid, with a potential rebate of up to $50,000.
The CRA also notes that there is generally a time limit to apply — typically within two years of taking ownership or completing construction.
Get In Touch Today
If you’re purchasing a new home and have questions about how the GST rebate applies to your transaction, our team can help review your documents and explain what to expect before closing.
