Ontario’s first-time home buyers are in for a financial windfall this season.
They are now eligible for the most comprehensive incentives ever offered, thanks to recently expanded first-time home buyer tax rebates. If you are in the market for your first home, you could save up to $130,000 with the newly introduced federal GST rebate for new homes and Ontario’s official HST rebate for first-time buyers.
Interested? Stay with us as we explain how these tax savings and additional first-time home buyer incentives work, and how to make them work for you.
The 2025 First-Time Home Buyer Tax Rebates
The federal government announced a 100% GST rebate for new homes up to $1 million purchased by qualified first-time buyers. This gives instant savings of up to $50,000 at closing.
Bear in mind that the GST rebate for new homes in Canada is phased out for new homes priced between $1 million and $1.5 million. And the rebate does not apply to homes above $1.5 million.
Ontario’s government has announced the removal of the 8% provincial portion of the HST for first-time home buyers of new properties up to $1 million. This means an additional $80,000 in tax relief. According to the Ontario government, when combined with other provincial and federal programs, your savings can reach up to $130,000.
More Ways to Save: Federal Housing Initiatives Canada
Besides first-time home buyer tax rebates, the federal government has also expanded programs that help with savings and approval for your new home:
- First Home Savings Account (FHSA): Tax-free contributions up to $40,000 for your down payment.
- Home Buyers’ Plan: Withdraw up to $60,000 from your RRSP for your home purchase without a tax penalty.
- 30-year amortization: First-time buyers of new builds can now qualify for insured mortgages with longer repayment terms, lowering monthly payments.
- Land transfer tax rebates: Ontario offers additional tax rebates of up to $4,000 for eligible first-time buyers.
- CMHC Shared Equity Program and various local grants.
How First-Time Home Buyer Incentives Add Up: Sample Calculation
|
Home Price |
GST Rebate (Federal) |
HST Rebate (Ontario) |
Land Transfer Tax Rebate |
Other Incentives |
Total Potential Savings |
|---|---|---|---|---|---|
|
$1,000,000 |
$50,000 |
$80,000 |
$4,000 |
Up to $16,000 |
Up to $150,000 |
Note: Amounts may vary; check with your real estate expert for up-to-date eligibility and offers.
What Buyers Must Know
- Eligibility: You must be a Canadian citizen or permanent resident and a true first-time buyer (no owned home in the past 4 years for you/your partner). You must be buying a new home or substantially renovated home as your principal residence with an agreement signed after May 27, 2025 (for GST and HST rebates).
- Stacking rebates: You can combine the Ontario HST rebate for first-time buyers with the federal GST rebate for new homes in Canada, plus federal and provincial incentives.
- Impact of rate cuts: The Bank of Canada’s recent interest rate cut improves mortgage affordability for new buyers.
Interest Rates Improve Affordability in 2025
The Bank of Canada’s recent rate cut—bringing the overnight rate to 2.25% as of October 2025—directly reduces mortgage costs. For first-time buyers already benefiting from rebates and incentives, lower rates mean:
- Smaller monthly mortgage payments
- Higher approval chances
- Better long-term affordability
This combination makes 2025 one of the most favourable years for entering the market in the past decade.
What Should First-Time Buyers Do Next?
With the new first-time home buyer incentives, reduced interest rates, and major tax savings, 2025 is a rare window of opportunity, especially for new buyers. To make the most of these benefits, you should:
- Speak with a trusted real estate professional
- Confirm eligibility for all rebates and programs
- Apply early for FHSA and HBP contributions
- Review mortgage options, including 30-year insured amortization
- Explore new-build communities that qualify for both GST and HST rebates
Some Frequently Asked Questions (FAQ)
Can the first-time home buyer tax rebates be combined?
Yes, Ontario HST and federal GST rebates combine for new homes, along with other incentives like FHSA and HBP.
Do these rebates apply to all resale homes?
No, the full rebates are only for new builds or substantially renovated homes up to $1 million; partial rebates apply up to $1.5 million.
Where do I apply?
Rebates are usually applied at closing with your builder, but speak with your real estate or mortgage professional to ensure all forms are completed.
How do the federal initiatives help me save up to $150,000?
By stacking the GST rebate, Ontario’s 8% HST removal, eligible land transfer rebates, and additional federal incentives like FHSA and 30-year amortizations, your overall upfront cost is drastically reduced.
Final Thoughts
With the new Ontario and federal first-time homebuyer tax rebates in 2025, including HST rebates that could save you up to $130,000, now is the ideal time to make homeownership a reality.
Alongside these generous incentives, Save Max is proud to offer exciting opportunities at the Mega Real Estate Expo, featuring spectacular luxury homes with over one acre of land and 3,500+ sq ft of living space near the GTA. Don’t miss your chance to benefit from these programs and exclusive projects.
Register now and take the first step towards your new home!