New Home Buyers: Tax and Rebates
GST/HST on a new home, the new housing and first-time buyer rebates, the home buyers' amount, FHSA and Home Buyers' Plan, and which closing costs to keep.
Buying a new home comes with more tax than people expect, and more money back than most people claim. Here's the whole picture on one page, before closing day.
The short version
- New homes carry GST or HST. Rebates can give part of it back, and most buyers assign them to the builder, who credits them in the price.
- First-time buyers may also get the first-time home buyers' GST rebate: up to $50,000, in full for homes up to $1 million, phased out by $1.5 million.
- On your tax return, a qualifying first home gets the $10,000 home buyers' amount, worth $1,400 off federal tax for 2026.
- Money for the down payment can come tax-free from an FHSA, or as a loan from your RRSP under the Home Buyers' Plan.
- Keep every closing document. Some costs become part of the home's cost, which matters if you ever rent part of it or sell a second property.
1. The GST or HST on a New Home
Unlike a resale home, a new home is taxable. The price in your agreement normally includes the tax, net of any rebates you assign to the builder. Two federal rebates matter:
- The new housing rebate: 36% of the GST or the federal part of HST, up to $6,300, in full for homes under $350,000 and gone at $450,000.
- The first-time home buyers' GST rebate: up to 100% of the GST or federal part of HST, maximum $50,000, for agreements with the builder from May 27, 2025. Full up to $1 million, nothing at $1.5 million or more. Once in a lifetime.
HST provinces have their own provincial rebate on top. In Ontario, that's a big number and a complicated form; our specialist site OntarioHSTRebates.ca covers it in depth. The details for the rest of Canada are in our new housing rebate guide.
Not sure which rebate you qualify for?
Describe your purchase in plain words: price, province, first home or not, who will live there. The answer comes with the CRA source.
2. First-Home Credits on Your Tax Return
- Home buyers' amount: $10,000 on line 31270 for a qualifying first home, split between buyers if you like. See home buyers' amount.
- FHSA: contributions are deductible like an RRSP, and a qualifying withdrawal for your first home is tax-free. See FHSA.
- Home Buyers' Plan: borrow from your RRSP tax-free and repay it over the following years. See Home Buyers' Plan.
- Ontario land transfer tax refund: first-time buyers in Ontario can get up to $4,000 of provincial land transfer tax refunded, usually at closing through your lawyer.
3. Closing Costs and Your Home's Cost
Legal fees and land transfer tax on the purchase become part of the home's cost (its adjusted cost base). For a home that's your principal residence the whole time, the gain is usually tax-free anyway, so it rarely matters. It matters a lot if you rent part of the home, move out and keep it, or own a cottage too. Keep the statement of adjustments with your important papers. See principal residence exemption.
4. Renting Part of It
A basement apartment or garden suite pays part of the mortgage, and comes with tax rules: the rent is income, a share of the costs is deductible, and claiming CCA on your own home can cost part of the principal residence exemption later. Read renting part of your home before you list it, and see GardenSuiteOntario.com if you're planning a garden suite.
Renting out a unit?
The Rental Property File keeps rents, expenses, CCA and your cost base year after year, and prints the T776 numbers for your return.
New Home Tax Questions
Do I pay HST on a new home in Canada?
Yes. New homes are subject to GST or HST, usually included in the price. Rebates can return part of it, and buyers often assign them to the builder, who credits them in the price.
What is the first-time home buyers’ GST rebate?
A federal rebate of up to 100% of the GST (or the federal part of HST), to a maximum of $50,000, for first-time buyers of new homes with agreements from May 27, 2025. It is full for homes up to $1 million and phases out by $1.5 million.
Can I claim the home buyers’ amount on a new home?
Yes, if it is a qualifying first home: neither you nor your spouse lived in a home either of you owned in the year of purchase or the four years before. It is $10,000, worth $1,400 off federal tax for 2026.
Should I keep my closing documents?
Yes. The statement of adjustments, legal bills and land transfer tax receipts set the home’s cost. Keep them as long as you own the home, and six years after you sell.
Sources: CRA, New housing rebate; CRA, First-time home buyers' GST/HST rebate; CRA, Line 31270, home buyers' amount. Checked October 2026. Not tax advice. CanadianTaxes.ai is not the Canada Revenue Agency.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.