At Kaizen Real Estate, we pride ourselves on staying ahead of the curve—especially when it comes to government policies that impact our clients’ ability to build wealth through real estate. This year, we’ve seen one of the most significant moves yet: the Canadian federal government has officially eliminated the Goods and Services Tax (GST) on new home purchases for first-time homebuyers, provided the home is under $1 million.

This change is a game-changer for aspiring homeowners across Canada and especially powerful in hot housing markets where affordability is a top concern.

The Landscape Before the GST Exemption

To understand how impactful this change is, it helps to know how things worked before.

Previously, if you were a first-time buyer purchasing a newly constructed or substantially renovated home, you were required to pay 5% GST on the purchase price. This tax wasn’t just a minor add-on—it translated into a significant extra cost, especially in major markets where new homes already came with a premium price tag.

Let’s break it down:

• On a $600,000 new home, GST added $30,000.

• On a $900,000 new home, buyers paid $45,000 in GST.

For many buyers, this additional tax was a deal-breaker, often delaying or completely derailing their path to homeownership.

What’s Changed: No More GST for Qualified Buyers

Under the new policy, first-time homebuyers are now exempt from paying the 5% federal GST on the purchase of new or substantially renovated homes priced under $1 million. This translates to thousands of dollars in immediate savings, helping more Canadians step into the real estate market with confidence.

Who Qualifies?

To benefit from this exemption, you must:

• ✅ Be a first-time homebuyer

• ✅ Be purchasing a newly built or substantially renovated home

• ✅ Ensure the purchase price is below $1 million

Meet these three criteria, and the 5% federal GST is waived—instantly lowering your closing costs.

What About HST in Ontario and British Columbia?

Here’s where it gets important: In provinces like Ontario and BC, the Harmonized Sales Tax (HST) combines the federal GST and the provincial sales tax into a single amount (13% in Ontario, 12% in BC).

The federal exemption only removes the GST portion of the HST. So, in Ontario and BC, you'll still pay the provincial part, but your total tax bill will still be lower than before—especially on higher-priced homes approaching the $1M cap.

We recommend connecting with your Kaizen Real Estate agent or a local tax advisor to get a personalized breakdown of your savings based on your location.

Why This Policy Matters

This isn’t just about tax—it’s about real opportunity.

• 📉 Lower upfront costs mean more Canadians can qualify for financing.

• 🏗️ Encourages construction of new homes, adding much-needed inventory to the market.

• 🏡 Supports long-term wealth-building, especially for younger buyers.

The government has acknowledged how hard it is for first-time buyers to enter the market. This policy is a tangible, immediate solution—and it gives Canadians a financial break exactly when they need it most.

A Policy with Broad Support

This move follows a similar proposal previously made by Conservative Leader Pierre Poilievre, reflecting bipartisan agreement that something had to change in the housing space.

It’s a bold step in the right direction—one that helps both first-time buyers and the broader housing economy by making new homes more attractive and affordable.

Final Thoughts from Kaizen Real Estate

At Kaizen Real Estate, we see this as more than just a tax break. It's a rare opportunity to save thousands, build equity sooner, and turn dreams of homeownership into a reality.

Whether you're just getting started or actively looking, our expert agents are ready to help you navigate this change and make the most of it.

Ready to take advantage of the GST exemption?

Let’s get you into your first home—with fewer taxes and more value. Schedule a Consultation with us Now! 

The door to your future just opened—let’s walk through it together.