Fiscal and Financial Planning Guide 2024-2025
Future owners > Goods and Services Tax (GST) and the Quebec Sales Tax (QST) refunds
First-time buyers of new homes
On May 27, 2025, the Minister of Finance, the Honorable François-Philippe Champagne, announced that the federal government is eliminating the 5% GST for buyers of a new first home valued at less than $1 million, representing a maximum saving of $50,000 ($5% x $1,000,000).
For homes valued between $1 million and $1.5 million, buyers will be entitled to a rebate that will gradually decrease to $0 when the value of the home reaches $1.5 million.
This measure is intended to reduce the cost of buying a first home and stimulate new home construction. It is one of a series of recent measures to facilitate first-time home purchases, such as the introduction of the TFSA and the increase in the Home Buyers’ Plan (HBP) limit to $60,000.
The following table illustrates this new measure.
Eligible individuals
To be eligible for the new program, an individual must generally:
- Be at least 18 years of age;
- Be a Canadian citizen or permanent resident of Canada;
- Not have lived in a home in Canada or abroad that they or their spouse owned in the previous year or in any of the previous four calendar years.
Eligible dwellings
The following conditions must generally be met:
- The buyer intends to make this dwelling his or her primary residence;
- In the case of a purchase, the contract is signed between May 27, 2025 and December 31st, 2030 and construction begins before 2031 and is completed before 2036;
- In the case of a home built by the owner, construction began between May 27, 2025 and December 31st, 2030 and is substantially completed before 2036.
Quebec (QST)
The Quebec government has not announced any changes to the provincial sales tax (QST) rebate program for the purchase of new homes.
Under current rules, buyers of new homes valued at $200,000 or less are entitled to a 50% QST rebate. The maximum rebate of $9,975 ($200,000 x 9.9975% x 50%) is gradually reduced for homes valued between $200,000 and $300,000.
The following table illustrates the amount of GST-QST for first-time buyers of a new home considering the effect of the new federal measure.
As shown in the table, the amount of taxes amounts to $99,750 for a house valued at $1 million and $224,625 for a house valued at $1.5 million, or approximately $125,000, i.e., 25% of the additional value of $500,000. This is due to the gradual reduction in the GST rebate in this bracket.
Buyers of a new home that is not their first home
Buyers of a new home that is not their first home are entitled to the following refunds:
GST and QST rebates are reduced as follows when the value of the home exceeds $350,000 for GST purposes and $200,000 for QST purposes.
The following table shows the combined GST-QST amount for a buyer of a new home that is not their first home, based on the value of the property:
Following the increase in house prices, the following graph shows that the number of requests for refunds is trending downward, given that refunds are reduced starting at a value of $450,000 at the federal level and $300,000 in Quebec.
We note indeed that the annual number of QST refund claims has fallen from over 25,000 in 2010 to less than 2,500 in 2024.
Eligible dwellings
The property must be purchased to serve as the primary residence of one of the buyers or one of their relatives.
For example:
- Child, grandchild;
- Father, mother, grandfather, grandmother;
- Brothers, sisters.
Property value
For the purposes of calculating the GST or QST rebate, the value of the property takes into account the following items, where applicable:
- Built-in appliances
- In-ground swimming pools
- Attached garages
- Landscaping
It should be noted that a GST/QST refund may be requested for a duplex in which the buyer resides, but the total value of the duplex must be taken into account for calculation purposes, which generally reduces the potential refund to zero.
Refund requests
Property purchased from a builder
- Request by the manufacturer
It is usually the manufacturer who makes the request and reduces the purchase price accordingly. In this case, the manufacturer completes form FP-2190.AC and has it signed by the buyer.
- Request by the buyer
Form FP-2190.P must be submitted to Revenu Québec within two years of the transfer of ownership.
Property built by the individual themselves
Form FP-2190.P must be filed with Revenu Québec within a period following the day on which the owner begins to occupy the property.