The federal government recently announced a new GST rebate aimed at helping first-time buyers save on the cost of newly built homes. Although the program was introduced in May, it has not yet come into effect. Still, there are reasons why it makes sense to move forward with a purchase now rather than wait.
The Rebate
The First-Time Home Buyer GST Rebate will remove the GST on new homes priced at or below $1 million. For homes priced between $1 million and $1.5 million, the GST will be reduced. This applies only to first-time home buyers and could result in savings of up to $50,000.
To qualify, the agreement of purchase and sale must be signed on or after May 27, 2025 and before 2031.
What Does This Mean for Buyers Right Now?
Although the rebate has been announced, the legislation to put it in place has not yet passed. It will be reviewed when Parliament returns in the fall. Until then, eligible buyers cannot receive the savings. It’s important to note that lenders will still require buyers to qualify for the full purchase price.
If you choose to buy a home now and the legislation is passed later, you will need to apply for the credit through the Canada Revenue Agency. As long as your agreement is signed within the program window, you remain eligible to receive the benefit once it’s available.
Why Buying Now Has Clear Advantages
If you qualify for the rebate and do not need it factored into your mortgage approval, buying now may work strongly in your favor.
You stay ahead of a busier market
Many first-time buyers are waiting for the rebate to take effect before entering the market. Buying now helps you avoid that wave of new competition and subsequent price increases due to competition.
You still remain eligible for the rebate
Even if you buy before the legislation is in place, as long as your agreement is signed within the rebate period, you will receive it either through the CRA or as a credit from your builder.
You secure today’s pricing
With rising construction costs and more demand expected, home prices could increase. Purchasing now protects you from future price shifts.
You get a head start on possession
Whether you’re purchasing a quick possession home or building from the ground up, starting the process now puts you ahead of longer timelines and limited inventory.
You’re not taking a risk
In the unlikely event the rebate does not pass, you’re still in a good position. You’ve secured current pricing and avoided a potentially more competitive market.
This rebate offers a clear financial benefit, but waiting for it to come into effect is not your only option. If you are in a position to buy now, you can get ahead of market pressures, securing your pricing, and still take advantage of the rebate once it is available. Moving forward today gives you more control and keeps you well positioned either way.
If you have questions about how this could apply to your home purchase, our team is here to walk you through it. Explore our available homes and models, and contact us below to learn more, today!
For more information, please visit www.chba.ca/assets/pdf/GST-HST-Relief-for-Buyers-of-New-Homes/
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