Big News for Ottawa First-Time Buyers: The Proposed GST/HST Rebate for New Builds

Oct 29

Buying your first home in today’s market can feel like an uphill climb. Between rising home prices, closing costs, and the added tax burden on new construction, it’s easy to see why many first-time buyers feel stuck renting. That’s why a new government proposal could make a major difference — especially for those looking to purchase new builds in Ottawa.

The Proposed First-Time Home Buyer HST/GST Rebate aims to make brand-new and substantially renovated homes more attainable for first-time buyers across Canada. Here’s a breakdown of what the program includes, how it works, and why it’s especially relevant for Ottawa’s growing new construction market.

What The Rebate Proposal Includes

Ontario has announced plans to refund the provincial portion of HST for eligible first-time buyers purchasing new or heavily renovated homes.

At the federal level, the proposal would allow qualifying buyers to receive up to 100% of the federal HST/GST portion back on the purchase of a new or substantially renovated property. Together, these rebates are designed to make new homes more affordable for buyers entering the market for the first time.

In simple terms, if you’re a first-time home buyer purchasing a new build or a home that’s been significantly renovated, you could recover a large portion, and in some cases, all of the HST you paid on the home.

Why The Government Introduced It

The goal behind the rebate is to address one of the biggest affordability challenges for new buyers: upfront tax costs.

On a $900,000 new build, the HST alone can add roughly $117,000 to the purchase price. By rebating a large portion of this, the federal and provincial governments hope to lower the total cost of entry into the housing market and make new construction more appealing to first-time buyers, which in turn supports more housing starts and economic growth.

Price Limits And Rebate Scaling

The amount you can receive depends on the purchase price of the home:

Homes priced up to $1,000,000: qualify for the full federal rebate, which can be worth up to approximately $50,000.
Homes priced between $1,000,000 and $1,500,000: the rebate phases down gradually, meaning you’ll receive a smaller percentage the closer you get to $1.5M.
Homes priced over $1,500,000: do not qualify for the federal rebate.

This sliding scale helps direct the benefit toward typical first-time buyer price ranges rather than luxury or investment properties.

Who Qualifies As A First-Time Buyer

To qualify for the rebate:

You must not have owned a primary residence in the last four calendar years.
Your spouse or common-law partner must also meet that requirement.
The home you’re buying must be your primary residence, not a rental or investment property.

If you meet all three conditions, you’re considered a first-time buyer under the proposed legislation.

Important Deadlines To Know

Because this rebate is part of proposed legislation, it hasn’t yet been passed into law, but here’s what’s currently outlined:

The purchase agreement must be signed on or after May 27, 2025, and before 2031.
Construction must be substantially completed before 2036.

That long timeline allows the rebate to apply to new homes currently under development as well as those that will be built in the coming years.

Why Ottawa Buyers Should Pay Attention

This rebate is particularly relevant for buyers in Ottawa because the city’s new-build market remains more affordable than in many other major Canadian cities.

Neighbourhoods like Barrhaven, Kanata South, Riverside South, and Orléans are filled with modern new communities from builders such as Minto, Mattamy, Claridge, Richcraft, and Caivan, and many of these homes are priced below the $1 million threshold.

That means a significant number of Ottawa buyers could qualify for the full rebate, unlocking savings of $50,000 or more, plus the $4,000 provincial Land Transfer Tax rebate.

For a first-time buyer, that’s the equivalent of covering most of your closing costs or offsetting a major portion of your down payment.

What Buyers In Ottawa Can Realistically Save

Here’s how the savings break down for typical new-build price points in Ottawa:

$800,000–$1,000,000: Full federal rebate (approx. $50,000) + Ontario Land Transfer Tax rebate (up to $4,000) = about $54,000 in total savings.
$1,100,000: Partial federal rebate (approx. $25,000–$30,000) + Ontario rebate = roughly $29,000–$34,000 saved.
$1,250,000: Reduced federal rebate (approx. $15,000–$20,000) + Ontario rebate = around $19,000–$24,000 saved.
$1,400,000: Small remaining rebate (approx. $5,000–$8,000) + Ontario rebate = $9,000–$12,000 saved.
$1,500,000+: No federal rebate, only the $4,000 provincial Land Transfer Tax rebate.

These numbers are estimates, but they paint a clear picture: the biggest financial advantage sits below $1 million, where the full rebate applies.

How This Impacts Ottawa’s Housing Market

In a city where construction activity remains strong and prices are generally lower than Toronto or Vancouver, this rebate could have a major influence on demand.

For many first-time buyers who were previously torn between resale and new-build options, the rebate could tip the scales toward buying new.

It may also drive competition for new-build inventory, especially townhomes and condo townhomes, property types that already attract first-time buyers due to their affordability, lower maintenance, and predictable costs.

In other words, Ottawa’s entry-level new construction market may see increased activity once this proposal becomes law.

Stacking Savings: Don’t Forget The Ontario Land Transfer Tax Rebate

On top of the HST/GST rebate, first-time buyers in Ontario can still take advantage of the Land Transfer Tax rebate, which provides up to $4,000 back on the provincial portion of the tax.

That rebate can be combined with the new HST/GST rebate for even greater savings, one of the few instances where first-time buyers can truly stack government incentives to their advantage.

Who Benefits The Most

This program is especially beneficial for:

First-time buyers purchasing new builds under $1 million.
Young professionals and couples who have been priced out of resale homes and want a brand-new property with lower maintenance.
Buyers comparing resale vs. pre-construction, since this rebate makes new construction more financially competitive.
Those planning to live long-term in their home, since the rebate is only available on primary residences, not rentals.

The Takeaway For Ottawa Buyers

If you’re considering a new build in Ottawa — particularly in Barrhaven, Kanata, Riverside South, or Orléans — this rebate could dramatically reduce your upfront costs.

Buyers who sign a purchase agreement after May 27, 2025, could qualify for tens of thousands of dollars back, making new construction more affordable than it’s been in years.

And while the proposal hasn’t yet been finalized, it’s a strong indication that the government is prioritizing first-time home buyers and new housing supply — two areas that have long needed more support.

Final Thoughts

As Vineet Kauden, Real Estate Agent at RE/MAX Hallmark, explains:

“For first-time buyers, especially those considering a new build, this rebate could be the difference between waiting another few years and buying your first home now. Ottawa’s market sits in the sweet spot where many properties still qualify for the full rebate, which makes timing and preparation crucial.”

At New Purveyors, we’re committed to keeping buyers informed as new programs and incentives roll out. If you’re planning to purchase a new construction home in the coming year, connect with one of our agents to learn how this rebate could affect your budget, timeline, and builder options.

This proposal represents one of the most significant affordability measures in recent years, and for many Ottawa buyers, it could open the door to homeownership sooner than expected.

Information courtesy of Vineet Kauden, Real Estate Agent at RE/MAX Hallmark, and publicly available government proposals. This article is for informational purposes only and not intended as legal or financial advice.