CHBA APPLAUDS FEDERAL ACTION TO ADJUST GST REBATE ON NEW CONSTRUCTION HOMES FOR FIRST-TIME BUYERS
OTTAWA, ON – Tuesday, May 27, 2025 – Today, hours after King Charles III delivered the Speech from the Throne, the federal government tabled legislative proposals to amend the Excise Tax Act to make good on its promise to introduce a new GST rebate for first-time home buyers (named the “FTHB GST Rebate”), which will remove the GST on new homes at or under $1 million and lower it on homes between $1 million and $1.5 million for all first-time home buyers, effective May 27, 2025.
CHBA applauds the government moving on this matter, as many would-be home buyers were waiting on the sidelines since the election promise was announced, which until now has hindered new home sales, and therefore, the construction of much-needed new housing.
“For years, CHBA has been advocating for a change to the GST thresholds on new construction homes to help address housing affordability challenges in regions across the country, and this measure is a very positive step forward for Canadians,” said CHBA CEO Kevin Lee. “Previously, without details around the implementation of this measure, Canadians wishing to enter the housing market were holding out on buying a new construction home, which results in fewer home starts, so it is encouraging that today first-time buyers can have the confidence to move forward.”
CHBA has long advocated with all major parties for updates to the GST New Housing Rebate thresholds, which have not changed since the introduction of the GST in 1991. At that time, the federal government committed to adjusting the GST New Housing Rebate thresholds every two years to reflect changes in housing prices and protect housing affordability over time. However, despite new home prices increasing substantially since then, the thresholds have never been adjusted by any government since.
Meanwhile, home builders in many parts of Canada have been operating in an extremely challenging business environment as slow sales persist. Affordability issues borne from the rising cost of construction, skyrocketing development charges in Canada’s major urban centres (notably in Ontario and British Columbia), mortgage rates remaining higher than inflation, and ongoing economic uncertainty due to the trade war with the U.S. have made it difficult for well-qualified buyers to purchase new homes, which has in turn, impacted builders’ ability to build.
CHBA is also recommending that the government extend their GST relief policy to all buyers of new homes (not solely first-time buyers), which would enable move-up buyers to purchase new homes and ensure a further boost of housing supply, freeing up entry-level homes for first-time buyers in the existing housing market. CHBA also recommends including Accessory Dwelling Units (ADUs) and secondary suites, which are important forms of new housing.
In addition, in Canada’s most expensive housing markets, like the Greater Toronto Area and the Greater Vancouver Area, where average home prices are over $1M, the limits should be increased to $1.5M for the full rebate, lowering through to $2.0M.
Moreover, the relief should be applicable to all new homes under the thresholds whose sales have not closed (i.e., where legal ownership of the property has not yet transferred to the buyer). If not, there will be many frustrated Canadians who have signed purchase and sale agreements already and will not be eligible, but are a long way off from taking possession of their home which may not even be under construction yet.
“While the quick action to move on the FTHB GST Rebate is welcome as it will go a long way to enable first-time home buyers to access homeownership, the housing supply gap is still widening,” said Lee. “We still urge the federal government to extend this measure to all home buyers, and reconsider the eligibility to make it based on closing date, not date of purchase and sale.”
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MEDIA INQUIRIES
Journalists wishing to interview Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association are encouraged to submit their request by email to media@chba.ca.
About the Canadian Home Builders’ Association
The Canadian Home Builders’ Association (CHBA) is the voice of the residential construction industry in Canada, representing some 8,500 member firms across the country. Our membership spans new home builders, renovators, developers, trade contractors, building material manufacturers and suppliers, lenders, and other professionals in the housing sector.
