After almost a year since Prime Minister Mark Carney announced the government’s intention to remove the GST on new homes priced at less than $1 million and lower it on homes between $1 million and $1.5 million for first-time buyers, Bill C-4 has received Royal Assent.

The delay in getting this bill through the many legislative stages and political filibustering has been extremely difficult for industry and for would-be buyers, according to Canadian Home Builders’ Association (CHBA). While the intent of the measure was to increase housing supply, the impact of not getting this through parliament has been the exact opposite.

Moving buyers off the sidelines

At every stage and at every opportunity, CHBA says it has been pressuring the government to pass C-4 to allow would-be buyers to move off the sidelines and take advantage of the proposed tax rebate, as well as advocating for an extension of GST relief.

The FTHB GST Rebate is available to qualifying purchasers if the agreement of purchase and sale for the home was entered into with the builder on or after March 20, 2025 and before 2031. If ownership was transferred to the buyer before the proposed legislation received Royal Assent, the buyer will need to apply separately to Canada Revenue Agency for the FTHB GST/HST rebate. Now that the legislation has received Royal Assent, builders will be able to credit the FTHB GST/HST rebate to their buyers using the CRA forms going forward.

While pushing for C-4 to be approved, CHBA says it has been advocating for an extension of GST relief to all buyers of new homes (not just first-time buyers), which would enable move-up buyers and downsizing buyers to purchase new homes and ensure a further boost of housing supply, freeing up entry-level homes for first-time buyers in the existing housing market.

In Ontario, the Residential Construction Council of Ontario (RESCON) is applauding the passage of Bill C-4, calling it a landmark legislation.

Welcome news

“While it took a long time to get here, the passage of Bill C-4 is extremely welcome news,” says RESCON President Richard Lyall. “Eliminating the GST for first-time buyers on new homes will make a meaningful difference for purchasers and help revive the new home market which has suffered greatly over the past couple of years. This has the potential to kick-start much-needed residential construction.

“The timing of this legislation is critically important,” adds Lyall. “Without swift passage, many potential buyers would have delayed their decisions over the summer, which would have further weakened an already fragile housing market. This will help kick-start the market.”