First-Time Buyer GST Rebate 2026: How to Stack It With FHSA and the Home Buyers' Plan
Bill C-4 is law: eligible first-time buyers can get up to $50,000 of federal GST back on a new home. Here's how to stack the rebate with FHSA, the $60,000 HBP, and other 2026 incentives.
Most first-time buyer articles still treat the GST rebate as a rumour. It is not. Bill C-4 received Royal Assent on 12 March 2026. Finance Canada's release that day is explicit: eligible first-time buyers get the federal GST off qualifying new homes up to $1 million, a partial reduction between $1 million and $1.5 million, and a maximum saving of $50,000.
The rebate is only one layer. The same buyer can usually stack a First Home Savings Account, the RRSP Home Buyers' Plan ($60,000), the federal First-Time Home Buyers' Tax Credit, and provincial land-transfer rebates. Resale buyers get the registered-account stack but not this GST rebate.
Build the stack in the first-time buyer calculator. Numbers below follow CRA program limits and the Finance Canada rebate design.
What Bill C-4 actually rebates
This is a rebate of the 5% federal GST (the federal part of HST in participating provinces), for a qualifying new or substantially renovated home used as your primary residence. It is a top-up relative to the older GST/HST new housing rebate, which largely phases out on homes above $450,000.
| Purchase price (qualifying new home) | Federal GST rebate (5%) |
|---|---|
| $700,000 | $35,000 |
| $800,000 | $40,000 |
| $1,000,000 | $50,000 (maximum) |
| $1,250,000 | $25,000 (halfway through the phase-out) |
| $1,500,000+ | $0 |
Phase-out rule of thumb used in industry explainers: from $1 million to $1.5 million you lose 20% of the $50,000 maximum ($10,000) for every $100,000 of price. Agreements generally must be signed on or after 20 March 2025 and before 2031. CRA processes claims now that the bill is law - often via the builder at closing, or self-filed within two years of taking possession.
It does not cut your mortgage rate, and it does not apply to a typical Toronto or Vancouver resale. If you are buying used, skip to FHSA + HBP below.
Who is a “first-time” buyer here
- At least 18 years old
- Canadian citizen or permanent resident
- You did not own a home you occupied as a principal residence in the year of purchase or the four preceding calendar years (the same style of test used elsewhere in the tax system)
- The property is a new or substantially renovated single-unit house or condominium that you intend to live in
Couples should confirm whose name is on title and who meets the first-time test - eligibility is personal, not automatically household-wide.
The registered-account stack (new or resale)
| Account | 2026 limit | Tax treatment on the way in | On a qualifying home withdrawal |
|---|---|---|---|
| FHSA | $8,000 / year, $40,000 lifetime (up to $16,000 in a year with carried-forward unused room) | Deductible (like RRSP). Deadline is 31 Dec - no 60-day grace. | Tax-free, no repayment |
| RRSP HBP | $60,000 per eligible buyer | You already got a deduction when you contributed | Tax-free if repaid over 15 years; missed minimums become income |
| TFSA | $7,000 new room in 2026 | No deduction | Always tax-free; no first-home conditions |
FHSA usually comes before extra RRSP for a first home because the withdrawal is never taxed and never repaid. That order is in our RRSP / TFSA / FHSA priority post and the FHSA vs HBP guide. Employer RRSP match still comes first if you would otherwise leave it on the table.
HBP repayment: CRA's current published relief starts the 15-year clock in year five for first withdrawals from 2022 through 2025. A 2026 first withdrawal falls under the standard “second year after withdrawal” rule unless a later extension is enacted and shows on your HBP statement. Do not plan a 2026 withdrawal on a five-year holiday until CRA My Account says so.
Worked stack: $800,000 new condo, couple, both first-time
Assumptions: both opened FHSAs in 2024, contributed $8,000 each year through 2026 (three years of contributions shown as principal only - growth is extra), both have $60,000 of RRSP they can tap under the HBP, Ontario, new build.
| Layer | Amount | Notes |
|---|---|---|
| Federal GST rebate (5% × $800k) | $40,000 | New build only; builder or CRA claim |
| Two FHSAs (contributions) | $48,000 | $8,000 × 3 years × 2 people; plus growth if invested |
| Two HBPs | $120,000 | Must be repaid; not “found money” |
| Federal FTHB tax credit | up to $1,500 each | Non-refundable; $10,000 claim |
| Ontario LTT first-time rebate | up to $4,000 | Provincial; confirm current rules at closing |
The GST rebate reduces what you pay the taxman on a new home. FHSA is true down-payment capacity. HBP is a 15-year loan from your future self. Mixing those three in one “$200,000 free” headline is how people over-buy. Use the calculator so each line stays honest.
Ontario also ran a time-limited new-home HST measure (calculator notes April 2026–March 2027, up to $130,000 on eligible new homes). Treat that as a separate provincial program: confirm with your builder and real-estate lawyer whether your occupancy date and agreement qualify. Do not double-count it with the federal 5% rebate without a closing-table worksheet.
Closing costs the rebate does not erase
- You still need to pass the B-20 stress test on a purchase (greater of contract + 2% or 5.25%).
- CMHC insurance still applies below 20% down on eligible insured deals.
- Land transfer tax, legal fees, and Toronto's municipal LTT (with its own first-time rebate, currently capped at $4,475 in our calculator) are separate.
Priority order for the next dollar
- Employer RRSP match, if any
- High-interest consumer debt (see card vs RRSP)
- FHSA up to $8,000 (or $16,000 with carry-forward)
- RRSP if you will use the HBP and your marginal rate makes the deduction valuable
- TFSA for the emergency fund you will still need after closing
Model it before you sign an assignment or APS
Open the first-time buyer calculator, toggle new-build, set province (and Toronto if it applies), and add FHSA + HBP. Check purchase qualification separately in home affordability. FHSA growth alone is in the registered-account calculator.
Rebate design is from the Department of Finance Bill C-4 news release (12 March 2026) and CRA GST/HST new-housing materials. FHSA and HBP limits are CRA program rules for 2026. Eligibility on a specific purchase is a legal and tax fact pattern - confirm with CRA, your builder, and your lawyer before you treat a rebate as cash in hand.
Run your own numbers with our free Canadian-tax-aware calculator.
Open First-Time Buyer Calculator - stack FHSA, HBP and rebates →