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Economic Viewpoint

Additional GST Relief for First Time Homebuyers: A Good Start, but Is It Enough?

June 9, 2025
Kari Norman
Economist

The federal government plans to eliminate the 5% GST on newly built homes priced up to $1M and lower the GST payable on homes up to $1.5M—but only for first‑time homebuyers. No relief is available above that threshold or for anyone other than a first‑time homebuyer.

Eliminating the federal sales tax of $50k on a $1M home could translate to mortgage savings of about $240 per month.

This policy is a substantial addition to the partial GST discount given under the New Housing Rebate, with its long-unchanged purchase price cap of $450,000. The updated GST rebate aligns with a broader suite of past and current federal government policies to expand housing supply and improve affordability.

As with any policy that increases demand, it risks accelerating price inflation if supply can’t keep up. To build a more resilient and inclusive housing market, affordability interventions must address both sides of the equation—buyers and builders—with all levels of government rowing in the same direction.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.