Last Updated On 27 February 2026, 5:12 PM EST (Toronto Time)
In a significant development for Canadian housing affordability, Bill C-4 officially completed its final reading in the Senate on Thursday, February 26, 2026.
The legislation, formally titled the “Making Life More Affordable for Canadians Act,” now returns to the House of Commons for consideration of Senate amendments before receiving Royal Assent and becoming law.
This legislative milestone brings first-time home buyers closer than ever to securing substantial tax relief on newly constructed homes.
Under the federal GST rebate provisions, eligible purchasers could recover up to $50,000 in federal goods and services tax on qualifying properties.
When combined with Ontario’s matching provincial HST rebate program (proposed bill, yet to become law), first-time buyers in that province could access combined savings reaching $130,000.
The timing of this Senate passage is particularly notable. With the House of Commons expected to address the Senate amendments swiftly given the bipartisan support the bill has enjoyed throughout its journey, Royal Assent could occur within days rather than weeks.
This means the Canada Revenue Agency may soon activate its rebate application system, allowing eligible home buyers to begin claiming their refunds.
Table of Contents
What Bill C-4 Contains for Home Buyers
Bill C-4 encompasses several affordability measures, but the GST rebate provisions for first-time home buyers represent one of its most impactful components.
The legislation amends the Excise Tax Act to establish a temporary first-time home buyers’ GST/HST rebate program.
Under these provisions, the federal government will eliminate the 5% GST (or federal portion of the HST) on newly constructed or substantially renovated homes purchased by eligible first-time buyers.
For properties valued at up to $1 million, qualifying purchasers can recover the entire GST amount, subject to a maximum rebate of $50,000.
This represents a dramatic improvement over the existing GST/HST new housing rebate, which caps relief at just $6,300.
The program operates on a phased structure. Homes valued between $1 million and $1.5 million qualify for partial rebates, with the available amount decreasing proportionally as the purchase price increases.
At the $1.5 million threshold, the first-time buyer rebate phases out entirely, though the existing new housing rebate may still apply.
The rebate calculation for homes in the phase-out range follows a specific formula.
If a first-time home buyer purchases a qualifying property for $1.25 million — the midpoint between $1 million and $1.5 million — they would be eligible for 50% of the maximum rebate, translating to $25,000 in federal tax relief.
This sliding scale ensures that buyers of moderately higher-priced homes still receive meaningful assistance.
Timeline and Legislative Journey
The journey of Bill C-4 through Parliament has been relatively swift, reflecting strong cross-party support for housing affordability measures.
The federal government introduced the legislation on June 5, 2025, during the 45th Parliament’s first session.
First reading in the House of Commons occurred that same day, with second reading following on June 12, 2025.
The Standing Committee on Finance completed its consideration of the bill on October 29, 2025.
During committee review, an important amendment was adopted: the effective date for the GST rebate was revised to apply to agreements of purchase and sale entered into after March 19, 2025, rather than the originally proposed date of May 27, 2025.
This backdating means that first-time buyers who signed purchase agreements earlier in 2025 may also qualify for the rebate.
The House of Commons completed the report stage on November 19, 2025, and the third reading on December 11, 2025.
The Senate received the bill and conducted its own thorough review, completing the first reading on December 11, 2025; the second reading on February 5, 2026; committee consideration on February 24, 2026; and finally the third reading on February 26, 2026.
The current status indicates the bill is “at consideration in the House of Commons of amendments made by the Senate.”
This procedural step typically moves quickly when there is consensus on the overall legislation.
When Will the GST Rebate on New Homes Become Law
With the Senate having passed Bill C-4 on third reading, only two steps remain before the legislation becomes law.
First, the House of Commons must consider and accept the Senate’s amendments.
Second, the bill requires Royal Assent from the Governor General.
Given the strong bipartisan support Bill C-4 has received throughout its legislative journey, experts anticipate minimal delays at this stage.
The House of Commons is expected to address the Senate amendments promptly, potentially within the coming days.
Once the House accepts the amendments (or if any differences are resolved through messaging between chambers), the bill proceeds directly to Royal Assent.
Royal Assent can be granted through a traditional ceremony in the Senate Chamber or through written declaration.
In recent years, written declarations have become increasingly common, allowing faster finalization of legislation.
Once Royal Assent is signified, Bill C-4 becomes an Act of Parliament, and the GST rebate provisions take legal effect.
Industry analysts and housing experts suggest that Royal Assent could occur as early as the first week of March 2026, depending on the House of Commons schedule.
The Canada Revenue Agency has been preparing for implementation and will publish detailed claim procedures, updated forms, and processing guidelines once the legislation receives final approval.
Eligibility Requirements for the GST Rebate
The first-time home buyers’ GST/HST rebate establishes specific eligibility criteria that purchasers must satisfy to qualify for tax relief.
Understanding these requirements is essential for prospective buyers planning to claim the rebate.
First-Time Home Buyer Definition
To qualify for the rebate, an individual must meet the definition of a “first-time home buyer” as specified in the legislation.
This requires that all of the following conditions be true at the time ownership of the property is transferred:
The buyer must be at least 18 years of age. This ensures that only adults who have legal capacity to enter into property transactions can claim the rebate.
The buyer must be a Canadian citizen or permanent resident.
This requirement aligns with the program’s goal of supporting Canadians in achieving homeownership rather than facilitating foreign investment.
The buyer must not have resided in a home that they or their spouse or common-law partner owned at any time during the calendar year of purchase or the previous four calendar years.
This five-year lookback period effectively limits the rebate to genuine first-time buyers or those who have been out of homeownership for an extended period.
Neither the buyer nor their spouse or common-law partner can have previously received a first-time home buyers’ GST/HST rebate.
This one-time benefit restriction prevents repeat claims.
Property Requirements
Beyond the personal eligibility criteria, the property itself must meet specific requirements to qualify for the rebate.
The home must be newly constructed or substantially renovated. This includes detached houses, townhouses, condominiums, mobile homes (including modular homes), and floating homes.
The rebate does not apply to resale properties where no substantial renovation has occurred.
The buyer must acquire the property for use as their primary place of residence.
Investment properties, rental units, and secondary residences do not qualify, regardless of the buyer’s first-time status.
For homes purchased from a builder, the agreement of purchase and sale must be entered into after March 19, 2025, and before 2031.
The construction or substantial renovation must begin before 2031 and be substantially completed before 2036.
For owner-built homes, the construction or substantial renovation must begin on or after May 27, 2025, and before 2031.
The construction or substantial renovation must be substantially completed before 2036. The buyer must be the first to occupy the home as a primary place of residence before 2036.
Value Thresholds
The purchase price or fair market value of the property determines the rebate amount available:
Homes valued at up to $1 million qualify for the full rebate, up to the maximum of $50,000 (representing 5% GST on a $1 million purchase).
Homes valued between $1 million and $1.5 million receive partial rebates on a sliding scale.
The rebate decreases proportionally as the value approaches $1.5 million.
Homes valued at $1.5 million or more do not qualify for the first-time buyer rebate, though the existing GST/HST new housing rebate may still be available.
Ontario’s Provincial HST Rebate Could Add $80,000 More
While the federal rebate under Bill C-4 offers substantial relief, first-time home buyers in Ontario stand to benefit even more through the province’s complementary HST rebate program.
On October 28, 2025, the Ontario government announced its intention to temporarily remove the full 8% provincial portion of the HST for eligible first-time buyers on qualifying new homes.
The Ontario rebate was presented as part of the province’s 2025 Fall Economic Statement and is designed to mirror the structure of the federal program.
When combined with the federal rebate, eligible first-time home buyers in Ontario could effectively eliminate the entire 13% HST on newly constructed homes valued at up to $1 million.
The provincial rebate can provide up to $80,000 in relief, representing the 8% provincial HST on a $1 million home.
This figure includes both the new first-time buyer rebate and Ontario’s existing HST New Housing Rebate, which provides up to $24,000 for eligible purchasers.
For homes valued between $1 million and $1.5 million, the Ontario rebate follows the same phase-out structure as the federal program.
The relief decreases proportionally as prices increase, but provincial relief will not fall below the $24,000 minimum that existing programs already provide.
Combined Savings of Up to $130,000
For first-time home buyers purchasing a newly constructed home in Ontario, the combined federal and provincial rebates represent one of the most significant housing affordability initiatives in recent Canadian history.
Consider a qualifying first-time buyer who purchases a new home for exactly $1 million.
Under the current HST structure, this buyer would pay $130,000 in harmonized sales tax (13% of $1 million). With both rebate programs fully in effect:
The federal GST rebate provides up to $50,000, eliminating the 5% federal portion of the HST.
The Ontario provincial rebate provides up to $80,000, eliminating the 8% provincial portion of the HST.
Combined, these rebates total $130,000, effectively making the home purchase tax-free from an HST perspective.
This dramatic reduction in upfront costs could make homeownership achievable for thousands of Canadians who might otherwise be priced out of the market.
Even for homes in the phase-out range, the combined benefits remain substantial.
A first-time buyer purchasing a home for $1.25 million would receive partial rebates from both programs, still resulting in significant savings compared to current conditions.
How the Rebate Process Will Work
Understanding the mechanics of claiming the GST/HST rebate is important for first-time buyers planning their purchases.
The rebate operates as a post-purchase refund rather than an upfront price reduction.
When purchasing a qualifying home, the buyer pays the full HST-inclusive purchase price to the builder at closing.
This means that at the time of transaction, the buyer must have financing or funds sufficient to cover the entire HST amount.
After closing, the buyer (or the builder on the buyer’s behalf) submits a rebate application to the Canada Revenue Agency.
Once the application is processed and approved, the CRA issues the rebate amount to the eligible purchaser.
For Ontario’s provincial rebate, a parallel application process through the provincial Ministry of Finance is expected to apply.
In practice, many builders facilitate the rebate process by assigning the rebate to themselves and crediting the amount to the purchaser at closing.
This is common industry practice with the existing GST/HST New Housing Rebate.
However, when this assignment occurs, builders must verify that purchasers genuinely qualify for the rebate.
If a builder knew or should have known that the buyer was not entitled to the rebate, the builder becomes jointly and severally liable to repay the amount.
The Canada Revenue Agency has indicated that detailed application procedures, required forms, and implementation timelines will be published once Bill C-4 receives Royal Assent.
First-time buyers who have already entered into qualifying purchase agreements since March 19, 2025, should retain all documentation related to their transaction and monitor CRA announcements for application opening dates.
Impact on the Housing Market
The introduction of significant GST/HST relief for first-time buyers is expected to influence the Canadian housing market in several ways.
Most immediately, the rebates should stimulate demand for newly constructed homes.
By reducing the effective price of new construction relative to resale properties, the program creates a financial incentive for first-time buyers to choose new builds.
This could benefit home builders and construction workers while potentially accelerating housing supply growth.
The Parliamentary Budget Office projected that the federal rebate alone would provide relief for approximately 71,711 new home purchases by first-time buyers over the program’s six-year term.
This represents roughly 4.8% of housing completions during this period, with an average subsidy of approximately $26,832 per qualifying purchase.
Housing market analysts have noted that the combined federal-provincial rebates could have particularly pronounced effects in Ontario’s market, where new construction prices often exceed $1 million in major urban centres.
The $130,000 potential savings addresses a significant portion of the down payment challenge that many first-time buyers face.
The programs may also create regional shifts in demand. Buyers priced out of central Toronto or Vancouver might find that the rebate makes new construction in surrounding suburban or exurban areas financially viable.
This could support the provincial and municipal goals of directing growth to areas with planned infrastructure and transit access.
Important Considerations and Limitations
While the GST/HST rebate programs offer substantial benefits, prospective buyers should understand several important limitations and considerations.
The rebates apply only to newly constructed or substantially renovated homes.
Resale purchases of existing homes do not qualify, regardless of the buyer’s first-time status.
This is because HST is not applied in the same way to resale transactions, making the “removal” concept inapplicable.
The programs are temporary measures with defined end dates.
Federal eligibility requires purchase agreements entered into before 2031, with construction substantially completed before 2036.
Buyers considering future purchases should be aware that these programs will not be available indefinitely.
Not all provinces have matching rebates.
While Ontario has announced a comprehensive provincial program, other HST provinces (Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island) have not announced similar first-time buyer rebates.
Buyers in these provinces may still access the federal rebate but would continue paying the provincial HST portion.
The rebate is not an immediate discount at closing. Buyers must have sufficient financing to pay the full HST-inclusive price, then wait for the rebate to be processed.
This creates cash flow considerations that buyers should discuss with their mortgage lenders and financial advisors.
Provincial and municipal land transfer tax rebates are separate programs with their own eligibility criteria.
These existing first-time buyer incentives may still be available alongside the new GST/HST rebates, potentially providing additional savings.
However, each program must be evaluated independently.
The passage of Bill C-4 through the Senate marks a pivotal moment for Canadian housing affordability policy.
After months of legislative deliberation, the substantial relief promised to first-time home buyers is now within reach of becoming law.
As the House of Commons considers the Senate amendments in the coming days, first-time home buyers across Canada will be watching closely.
The swift resolution of any remaining legislative formalities would allow the CRA to begin accepting applications, potentially before the spring 2026 housing season is in full swing.
For eligible first-time buyers ready to enter the market, the timing could prove favourable.
New construction inventory remains available in many markets, and sellers may be motivated to complete transactions that allow buyers to access available rebates.
The coming weeks and months will reveal how quickly the market responds to these significant new incentives.
Frequently Asked Questions (FAQs)
Can I claim the GST rebate if I signed my purchase agreement in 2024?
No, the first-time home buyers’ GST/HST rebate requires that your agreement of purchase and sale be entered into after March 19, 2025. Purchase agreements signed before this date do not qualify for the new rebate, though the existing GST/HST new housing rebate (up to $6,300) may still apply if other eligibility conditions are met.
Does the rebate apply to condominiums and townhouses, or only detached homes?
The rebate applies to all types of newly constructed or substantially renovated residential properties, including detached houses, semi-detached homes, townhouses, condominiums, mobile homes, modular homes, and floating homes. The key requirement is that the home must be new or substantially renovated — not the structural type.
What happens if I own an investment property but have never lived in a home I owned?
The first-time home buyer definition focuses on whether you resided in a home you owned, not simply whether you held property title. If you owned an investment property but never lived in it, and you have not resided in any home you or your spouse owned in the past five years, you may still meet the first-time buyer criteria. However, individual circumstances vary, and you should seek professional advice.
If my spouse owned a home before we met but sold it five years ago, do I still qualify?
The five-year lookback period examines whether you or your spouse resided in an owned home during the year of purchase or the four preceding calendar years. If your spouse sold their home and neither of you has resided in an owned property during this entire period, you may qualify. The exact timing and circumstances matter, so consulting with a tax professional before relying on this interpretation is advisable.
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