The $50,000 Question: Toronto’s New GST Rebate and What It Really Means

June 9, 2025

If you’ve lived in Toronto long enough, you’ve probably felt it.

The constant push and pull between hope and exhaustion when it comes to buying a home. That quiet voice saying, “maybe next year,” followed by another rent renewal, another missed opportunity, another month where ownership feels out of reach.

But beneath the surface of a quiet spring market, something big is shifting.

As of May 27, 2025, the federal government is offering a new GST rebate for first-time homebuyers. It could save you up to $50,000 when you buy a newly built home under $1 million. It’s a real incentive — but also a signal that things in the housing market aren’t as calm as they seem.

So, What’s the Rebate?

Here’s how it works:

  • Buyers of newly built homes under $1 million get a 100% rebate of the 5% federal GST.

  • For homes priced between $1 million and $1.5 million, the rebate phases out gradually.

  • Homes priced over $1.5 million do not qualify.

  • Applies to pre-construction homes, condos, co-ops, and even owner-built properties.

  • You must be a first-time buyer, 18+, a Canadian citizen or permanent resident, and you must sign the Agreement of Purchase and Sale (APS) on or after May 27, 2025.

This is one of the most significant incentives first-time buyers have seen in years.

Why Now?

On the surface, this rebate looks like a gift to help buyers afford homes.

But if you look closer, it’s also designed to help developers survive.

Because while listings may be up and prices feel softer, new construction has slowed dramatically. Projects are being paused. Builders are scaling back. Financing costs are high, and many developers are struggling to move units. Some have even walked away from land or shelved entire buildings.

This is a serious problem.

What We're Not Building Today Will Hurt Us Tomorrow

It might look like we have too many listings today. But that’s a short-term illusion.

Immigration hasn’t slowed. Canada’s population continues to grow. Toronto is still adding thousands of people every month. And when interest rates eventually fall, demand will surge again.

If developers don’t keep building now, we will find ourselves in a full-blown supply crisis in just a few years. That means higher prices, fewer options, and more competition for what little housing remains.

This rebate is not just about helping buyers. It’s about keeping developers in the game. It’s about making sure housing is being built now so that future buyers, renters, and growing families have somewhere to live.

What You Need to Know

  • This rebate applies to the federal portion of the GST or HST only. Provincial rebates, like Ontario’s HST rebate, are separate.

  • The Agreement of Purchase and Sale must be signed on or after May 27, 2025 to qualify.

  • You cannot have owned a home in the last four years, and neither can your spouse or partner.

  • The rebate can either be credited by the builder directly or applied for through the CRA after closing.

  • Each individual can only claim the rebate once.

Why This Matters for Toronto

Toronto doesn’t just have a housing affordability problem. It has a housing pipeline problem.

If we don’t support new construction now, the units won’t be there when we need them — and we will need them. This rebate is a temporary solution to a long-term issue: keeping the system moving when confidence is low and costs are high.

It’s also a rare opportunity for first-time buyers to enter the market on better terms. Yes, prices are still high. But this rebate, combined with builder incentives and a softening resale market, could be the edge many buyers need.

Final Thoughts

This isn’t just a rebate. It’s a signal.

A signal that the government knows things are fragile. That we need to support both ends of the housing market — the buyers and the builders — or risk another, much worse shortage in the near future.

If you’ve been waiting, watching, or feeling stuck on the sidelines, this could be your moment to reassess. And if you want help understanding how this affects your buying strategy, I’m here for that conversation.

Let’s talk. The future of Toronto housing depends on what we build today.