The first-time buyer GST rebate: what it's worth in Ottawa

Since this became law in March, the most common question I get from first-time buyers is some version of "wait, can I actually get the GST back on a new house?" The short answer is yes, if you're buying new construction and it's your first home. The longer answer is where the money actually sits, and it's more real in Ottawa than almost anywhere else in the country.

The First-Time Home Buyers' GST rebate received Royal Assent on March 12, 2026, and the CRA is now taking applications. It does what it sounds like. For a qualifying first-time buyer of a new home, it wipes out the federal GST, up to $50,000.

What the rebate actually does

In Ontario we pay 13% HST on a newly built home. Five of those points are the federal GST and eight are the provincial portion. This rebate goes after that federal 5%.

The structure is a sliding scale:

• New home valued at $1 million or less: up to 100% of the GST back, to a maximum rebate of $50,000.
• Between $1 million and $1.5 million: the rebate shrinks on a straight line. A $1.25 million home sits at the midpoint, so it qualifies for half, or $25,000.
• At $1.5 million or above: nothing.

The $50,000 ceiling is exactly 5% of $1 million, so the cap and the full-rebate threshold line up. On a new home priced at $780,000, the GST works out to $39,000, and a qualifying first-time buyer can recover the whole amount.

That is a real change, not a tweak. The old federal new-housing rebate faded out completely above $450,000, which meant almost every new-build buyer in Ottawa got nothing back federally. Now a first-timer buying under a million dollars can get all of it.

Who counts as a first-time buyer

The definition is stricter than people assume, and it isn't the same as the land transfer tax rebate rules. To qualify, you and your spouse or common-law partner can't have lived in a home either of you owned as your primary residence in the current calendar year or any of the four before it. Owned a condo five years ago, sold it, and rented since? You're likely back in. Still on title to a place you live in? You're out.

A few more conditions trip people up:

• The home has to be your primary residence, not a rental or a flip.
• Your agreement of purchase and sale with the builder has to be dated on or after March 20, 2025 and before 2031. If you signed your new-build contract in 2024, it doesn't qualify even if you close this year.
• It has to be new construction or a substantial renovation, which the CRA treats as gutting roughly 90% of the interior.

You apply within two years of taking ownership or completion.

Why this lands harder in Ottawa

Most of the national coverage of this rebate came out of Toronto and Vancouver, where the $1 million to $1.5 million phase-out is exactly where a lot of new product sits. Ottawa is the opposite story.

The new-build inventory that first-time buyers actually shop here mostly sits under the million-dollar line. New townhomes in Barrhaven and Riverside South run from the high $500s into the $600s. New singles in Kanata, Orleans, and Stittsville mostly land in the $700s and $800s. That is squarely in the 100% zone. Where a Toronto buyer often gets a partial rebate or none, an Ottawa first-timer buying new is frequently looking at the full GST back.

Put numbers on it. A $650,000 new townhome carries $32,500 in GST. An $825,000 new single carries $41,250. For a qualifying first-time buyer, that is the potential rebate. That is not a rounding error on the down payment. In a lot of cases that is the down payment, or a serious chunk of it.

The catch: resale gets nothing

Here is where I cool the excitement. This rebate applies only to new construction and substantial renovations. The large majority of what trades in Ottawa is resale, and resale buyers get zero from this program. If you're shopping a 1990s detached in Orleans or a century home in the core, this changes nothing for you.

What it does do is tilt the new-versus-resale decision for first-timers who were already on the fence. If you're weighing a $700,000 resale against a $740,000 new build, the real gap isn't $40,000 once up to $37,000 of GST comes back on the new one. That comparison is worth running properly before you write new construction off as too expensive.

I'd still warn against letting the tax tail wag the dog. New builds carry their own realities: longer closing timelines, deposit schedules, occupancy fees on condos, and the risk of buying off a floor plan you can't walk through. The rebate is a strong reason to look at new construction. It isn't a reason to ignore everything else that matters.

How it fits with the rest

This stacks with your other first-time tools instead of replacing them. Your down payment can still come out of an FHSA and a Home Buyers' Plan withdrawal, and you can still claim the Ontario land transfer tax rebate of up to $4,000 at closing. Ottawa has no municipal land transfer tax, so that provincial rebate is the only land transfer tax you're managing here, which is one of the quiet advantages of buying in this city instead of Toronto.

Sort out one thing early on any new-build purchase. The older GST new-housing rebate is often assigned to the builder and baked into the price you're quoted. This new first-time buyer rebate is claimed by you. Get the builder and your accountant to put in writing who is claiming what, so you're not double-counting or leaving money on the table.

The bottom line

If you're a first-time buyer and new construction was already on your list, this rebate is a genuine reason to look harder, and in Ottawa it usually means the full GST back rather than a partial credit. If you're set on resale, it's noise. The useful move is to know which camp you're in before you fall for a listing.

If you want to figure out whether a specific new build actually pencils out with the rebate factored in, that's a conversation worth having before you sign. I'll run the real numbers on the exact home with you. Call or text me at 613-262-6545, or email fil@613realtor.ca.