- The regular federal new housing rebate is nil once the total consideration reaches $450,000, so it does not help on a $1,000,000 home.
- A first-time home buyer may claim a rebate of the lesser of $50,000 and the tax paid, minus any regular section 254(2) rebate, on a home priced at $1,000,000 or less.
- Between $1,000,000 and $1,500,000 the first-time buyer rebate shrinks, and at $1,500,000 or more it is nil.
A new home at $1,000,000 carries a lot of GST or HST, and many buyers hear that there is a rebate without knowing whether it applies at that price. The answer depends on which of two federal rebates you are talking about, because they work very differently.
This article walks through the numbers at $1,000,000 and at nearby prices, explains who qualifies for the larger rebate, and lists what to check before closing. Your own result depends on your facts, so treat the examples as illustrations.
This article covers Canadian federal tax law, which applies in every province.
Why the regular rebate is nil at $1,000,000
The regular new housing rebate under section 254(2) of the Excise Tax Act is capped at the lesser of $6,300 and 36% of the GST (or federal part of HST) paid, and that full amount is available only where total consideration is $350,000 or less. Between $350,000 and $450,000 it phases out, and at $450,000 or more the rebate is nil.
On a $1,000,000 new home, the base rebate is therefore nil because the $450,000 threshold is exceeded. For a home bought from a builder, these thresholds are tested against total consideration, which is the purchase price excluding GST/HST and certain other amounts.
The first-time home buyer rebate at $1,000,000
The only federal relief for a home above $450,000 is the first-time home buyers' rebate under section 254(2.1). For a new home with total consideration of $1,000,000 or less, it equals the lesser of $50,000 and the tax paid, minus any section 254(2) rebate.
As an illustration, with 5% GST on a $1,000,000 home the tax is $50,000, so a qualifying buyer's rebate would be up to $50,000. Because the base rebate is nil at that price, nothing is subtracted.
The rebate is a percentage of the tax paid, not of the price, so the tax actually paid on your home is the figure to check.
What happens above and below $1,000,000
The first-time buyer rebate phases out between $1,000,000 and $1,500,000. The formula is C × [($1,500,000 − D) ÷ $500,000], where C is the lesser of $50,000 and the tax paid and D is the total consideration. At $1,500,000 or more it is nil.
| Total consideration | Regular rebate (s. 254(2)) | First-time buyer rebate (s. 254(2.1)) |
|---|---|---|
| $350,000 or less | Lesser of $6,300 and 36% of tax paid | Lesser of $50,000 and tax paid, minus the regular rebate |
| $400,000 | $3,150 with 5% GST | Same formula, minus the regular rebate |
| $1,000,000 | Nil | Lesser of $50,000 and tax paid |
| $1,250,000 | Nil | Half, up to $25,000 |
| $1,500,000 or more | Nil | Nil |
A buyer who fails the first-time buyer test may still qualify for the regular rebate, and the first-time buyer rebate can be claimed in addition to the regular one as a top-up.
Who qualifies as a first-time buyer
- You are at least 18 and a Canadian citizen or permanent resident.
- You have not lived in a home you owned, alone or jointly, as your primary residence in the current calendar year or the previous four years.
- Neither you nor your spouse or common-law partner has received a first-time buyer rebate before.
- You are the first occupant and are buying as your primary residence.
A spouse or common-law partner's earlier home ownership in that period, and any earlier rebate they received, count against you. A person can claim the first-time buyer rebate only once in their lifetime.
Timing rules and what to do next
The agreement of purchase and sale must be entered into after March 19, 2025 and before 2031, construction must begin before 2031 and be substantially completed before 2036, and ownership must transfer before 2036. If you are taking over another person's builder agreement through an assignment, the rules are stricter. A first-time buyer who takes over a builder agreement signed before May 27, 2025, the date of the Finance Canada announcement, cannot claim the first-time buyer rebate, and cancelling and replacing an earlier agreement may also disallow it. Check the date on your agreement carefully, and confirm how it applies to an assignment with a lawyer or accountant.
For a house bought from a builder, the application deadline is two years after ownership transfers. Missing it on a builder purchase generally means the rebate is lost.
- Confirm the purchase price excluding GST/HST and the tax actually charged.
- Confirm the date on your agreement and any assignment.
- Check your own and your spouse's or partner's home ownership history.
- Ask whether the builder will credit the rebate on closing.
- Keep the statement of adjustments and records for six years.
If the numbers are large or your situation is unusual, a lawyer or accountant can confirm which rebate applies.
Frequently asked questions
Do I get the regular GST/HST rebate on a $1,000,000 new home?
No. The regular rebate under section 254(2) is nil where total consideration is $450,000 or more. Only the first-time home buyers' rebate can apply at that price, if you qualify.
What is the most I can get on a $1,000,000 home?
For a qualifying first-time buyer, the rebate is the lesser of $50,000 and the tax paid, minus any regular rebate. The amount depends on the tax actually paid.
What if my home costs $1,250,000?
The first-time buyer rebate phases out between $1,000,000 and $1,500,000. A $1,250,000 home gets half, up to $25,000.
How long do I have to apply?
For a house bought from a builder, you generally have two years after ownership transfers. Late requests are not considered for builder purchases.
Sources
- Excise Tax Act s. 254 (Justice Laws) — Justice Laws (federal)
- CRA Guide RC4028 GST/HST New Housing Rebate — canada.ca
- Department of Finance Canada backgrounder — canada.ca
- CRA – FTHB GST/HST rebate: Who can apply — canada.ca
- CRA – First-time home buyers' GST/HST rebate — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a tax question
Ask our Team for a quote. We reply by email.