First-Time Home Buyers' GST/HST Rebate Explained

A new first-time home buyers’ (FTHB) GST/HST rebate is now federal law, and in Ontario it stacks with a second, temporary provincial rebate. Together they can be worth up to $130,000 on a qualifying new home. Here is exactly how the two rebates work, who qualifies, and how they interact — or skip the math and use the FTHB GST/HST rebate calculator.

Enacted, not proposed

The FTHB GST/HST rebate is federal law under Bill C-4, introduced June 5, 2025, passed by the House of Commons on December 11, 2025, passed by the Senate on February 26, 2026, and given Royal Assent on March 12, 2026. The CRA confirmed the rebate was live and accepting applications from March 17, 2026.

In Ontario, a parallel provincial rebate — the Ontario enhanced new housing rebate (ENHR) — was tabled in the province’s 2026 budget on March 26, 2026 and enacted through Bill 114, the HST Relief Implementation Act (Residential Property Rebates), 2026, which received Royal Assent on May 12, 2026 (now Statutes of Ontario 2026, chapter 5). The federal HST regulations that let the CRA administer the Ontario rebate followed on June 12, 2026, and the federal funding partnership behind Ontario’s related 5% top-up — Bill C-26, the Improving Housing Supply Act — received Royal Assent on June 18, 2026. As of this article’s publication date, both levels are fully in force.

Who qualifies as a first-time buyer

The CRA’s rule is specific about the look-back window. Quoting directly:

“Generally, to be considered a first-time home buyer, all of the following must be true: You are at least 18 years of age. You are a Canadian citizen or permanent resident of Canada. You have not lived in a home that you or your spouse or common-law partner owned, or jointly owned, whether in or outside of Canada, as your primary place of residence at any time in the calendar year or in the previous four calendar years… Neither you, nor your spouse or common-law partner, have previously received an FTHB GST/HST rebate.”

That is a roughly five-year look-back measured in calendar years, not a rolling 60-month clock from your purchase date — the CRA’s own examples show a 2022 home sale disqualifying a buyer who takes ownership in August 2026, but not one who takes ownership in February 2027, once 2022 falls outside the window. The home must also be for use as your primary place of residence.

Eligible purchase types include new homes bought from a builder, owner-built homes, co-op shares, and newly built mobile or floating homes.

The federal rebate: how much and how it phases out

The rebate covers the 5% federal part of GST/HST on qualifying new homes:

• At or below $1,000,000 — up to 100% of the tax, capped at $50,000
• Between $1,000,000 and $1,500,000 — the maximum rebate is reduced on a straight line
• At or above $1,500,000 — no rebate

The CRA’s own worked example shows the phase-out is a straight-line reduction of the rebate dollar amount, not the tax rate:

“An eligible individual purchases a new home for $1.25 million. A new home valued at $1.25 million is the mid-point between $1 million and $1.5 million, and is eligible for 50% of the maximum rebate of $50,000. The individual is eligible for a rebate of $25,000 (which is 50% of the $50,000 maximum rebate) when all the conditions for the rebate have been met.”

Applying the same confirmed formula — $50,000 × (1,500,000 − price) / 500,000 between $1.0M and $1.5M — to a home price the CRA has not itself published an example for: an $800,000 home sits below the $1M threshold, so a first-time buyer is eligible for 100% of the GST paid, up to the $50,000 cap. This $800k figure is a derived calculation using the CRA’s confirmed rule, not a quoted CRA example.

Agreement and completion windows: the agreement of purchase and sale with the builder must be entered on or after March 20, 2025 and before 2031; construction must begin in that same window and be substantially completed before 2036; ownership must transfer before 2036. Owner-built homes and co-op shares follow the same March 20, 2025 / 2031 / 2036 date structure.

The rebate is a top-up, not a replacement

Canada has had a GST/HST New Housing Rebate for years: 36% of the GST paid, capped at $6,300, phasing out between a fair market value of $350,000 and $450,000 (Guide RC4028). The new FTHB rebate does not replace this — it tops it up. The CRA is explicit:

“As a first-time home buyer, you may be eligible for the FTHB GST/HST rebate in addition to the existing GST/HST new housing rebate. Where both rebates apply, the FTHB GST/HST rebate acts as a top up to the existing GST/HST new housing rebate.”

In practice this means: work out the existing 36%/$6,300 rebate first, then the FTHB rebate fills the gap up to the applicable cap (full $50,000 at/below $1M, phasing to $0 at $1.5M).

Ontario’s second layer: the enhanced new housing rebate (ENHR)

Ontario buyers can also claim a temporary provincial rebate on top of the federal one. CRA Notice 346 sets out the mechanics for the 8% provincial part of the HST:

“The Ontario ENHR provides: a full rebate (100%) of the 8% provincial part of the HST paid on a new home valued up to $1 million; a flat rebate of $80,000 for the provincial part of the HST paid on a new home valued between $1 million and $1.5 million; a partial rebate for the provincial part of the HST paid on a new home valued between $1.5 million and $1.85 million. For a new home valued at $1.85 million and above, the existing Ontario new housing rebate is available at a flat rate of $24,000.”

So the $1M–$1.5M band is a flat $80,000 (it does not itself phase down), and the phase-out to the pre-existing $24,000 baseline happens specifically in the $1.5M–$1.85M band. The ENHR is not limited to first-time buyers — it follows the existing Ontario new housing rebate’s eligibility rules. A separate, first-time-buyer-only Ontario FTHB rebate (also up to $80,000) exists too, but the two Ontario rebates share one combined cap.

Order of operations matters. Notice 346 is explicit about claiming order and the combined ceiling:

“Where an individual is eligible for the federal first-time home buyers’ (FTHB) GST rebate, the individual should claim that rebate before claiming the Ontario ENHR. If there is any amount related to the 5% part of the HST that could not be rebated through the FTHB GST rebate, the individual could then claim that amount through the Ontario ENHR. Where an individual is eligible for both the Ontario ENHR and the Ontario FTHB rebate, the individual is permitted to claim either or both Ontario rebates. However, the total amount of all rebates for the 8% provincial part of the HST cannot exceed the lesser of $80,000 and the 8% provincial part of the HST payable in respect of the purchase or construction of the home.”

There is also a separate 5% Ontario top-up, funded through Ontario’s share of federal Bill C-26 money, matching the federal 5% portion:

“In addition to the Ontario ENHR, the province is providing additional relief equivalent to a maximum of the 5% federal part of the HST (5% Ontario top-up). To be eligible for the 5% Ontario top-up, individuals must be eligible for and have received the Ontario ENHR… A separate form is not required to claim the 5% Ontario top-up… receive a separate payment from the province for the 5% Ontario top-up after the Ontario ENHR is assessed.”

Ontario agreement window: the ENHR applies to homes purchased from a builder between April 1, 2026 and March 31, 2027, and to owner-built homes where construction begins in the same window.

Worked example: the $130,000 combined maximum

A first-time buyer in Ontario purchasing a qualifying new home at or below $1,000,000, with both windows met, can reach:

• $50,000 federal FTHB rebate (the maximum, reached at or below $1M)
• $80,000 Ontario ENHR / ON-FTHB rebate (the combined Ontario cap)
• $130,000 total

This reconciles the “$130,000” figure widely reported in the press with the primary-source ordering rule: claim the federal rebate first, then the Ontario rebate for the remainder, capped in aggregate at $80,000 for the provincial portion. At higher prices the two rebates phase down on different schedules and different bands, so the combined total is never simply additive above $1M — use the calculator for any price outside the $1M full-rebate zone, or compare against a Home Buyer’s Plan withdrawal on the combined first-home planner.

Claiming the rebate: forms and time limits

Two paths exist. If the builder agrees to credit the rebate at closing, the builder files the application — you generally cannot file a separate claim for the same house afterward. Otherwise, you apply directly to the CRA (the fastest route is online through your CRA account), within a 2-year time limit from the date ownership, possession, or the co-op share transferred to you.

Forms:

What’s not yet settled: CRA Notice 346 states plainly that guidance on how to apply for the Ontario ENHR for owner-built homes “will be provided when available” — the mechanics were not published as of the notice’s date. Updated GST190/RC7190-ON forms were targeted for availability by mid-July 2026 per the same notice; this article does not independently confirm they were live and in use as of publication.

If a base rate change to CPP contributions also affects your household budget this year, see what’s changing with the CPP contribution rate cut for 2027 and the CPP & EI calculator.

Sources: CRA — FTHB GST/HST rebate hub, who can apply, rebate formula and example, Notice 346, Ontario ENHR, and Guide RC4028.