Bill C-4 guide: 100% GST rebate for first-time buyers

As a mortgage broker in Burnaby, BC, I'm constantly looking for ways to help my clients achieve their homeownership dreams. One of the most significant recent developments for first-time homebuyers in Canada is the new federal GST rebate under Bill C-4. Paired with the First Home Savings Account (FHSA), this initiative offers substantial savings that can make a real difference in affordability.

Understanding the New Federal GST Rebate (Bill C-4)

Buying a newly constructed home typically involves paying Goods and Services Tax (GST) on top of the purchase price. This can add tens of thousands of dollars to your costs. Bill C-4, which received Royal Assent in March 2026, introduces a new federal GST rebate specifically for first-time homebuyers of new builds.

Here's how it works:

• Full Rebate: If you're purchasing a new home valued at $1 million or less, you can receive a full rebate of the 5% federal GST, potentially saving you up to $50,000.
• Partial Rebate: For homes priced between $1 million and $1.5 million, the rebate is gradually reduced on a linear basis. For example, if you buy a home for $1.25 million, you could still receive a rebate of $25,000.
• No Rebate: Homes valued at $1.5 million or more are not eligible for this rebate.

This rebate applies to agreements of purchase and sale entered into on or after March 20, 2025, and before 2031. The best part is that in most cases, the builder will credit you the savings directly at closing, so you don't have to pay the tax upfront and wait for a refund. This immediate saving can significantly reduce the amount you need to borrow, leading to lower interest payments over the life of your mortgage.

Who Qualifies for the Rebate?

The eligibility criteria for this new federal GST rebate are specific:

• You must be at least 18 years old.
• You must be a Canadian citizen or permanent resident.
• Neither you nor your spouse or common-law partner can have owned and lived in a home as your primary residence in the current calendar year or in the four preceding calendar years. This is a five-year lookback period.
• The home must be a newly constructed or substantially renovated property and intended to be your primary place of residence. Resale properties without substantial renovations do not qualify.
• You must be the first person to occupy the home as a residence after construction is complete.
• Investment properties or secondary residences are not eligible.

It's important to note that if you signed your purchase agreement after March 20, 2025, but closed before March 12, 2026 (when the law officially came into effect), you may still be eligible. In this scenario, you would need to claim the rebate directly through the Canada Revenue Agency.

Combining with the First Home Savings Account (FHSA)

The FHSA is another powerful tool for first-time homebuyers, and it works exceptionally well with the new GST rebate. Launched in 2023, the FHSA allows you to save for your first home with a unique combination of tax benefits: contributions are tax-deductible (like an RRSP), and qualified withdrawals for a home purchase are tax-free (like a TFSA).

You can contribute up to $8,000 annually, with a lifetime maximum of $40,000. Unused contribution room carries forward. For a couple, this means a potential $80,000 in tax-advantaged savings. By maximizing both the FHSA and the GST rebate, you can significantly reduce your upfront costs and the overall amount you need to finance.

Other Key First-Time Buyer Programs in BC

While the federal GST rebate and FHSA are fantastic, it's also crucial to be aware of provincial programs and other federal initiatives that can further assist first-time buyers in British Columbia:

• BC Property Transfer Tax (PTT) Exemption: In BC, the Property Transfer Tax is applied to most property purchases. However, qualified first-time buyers can receive a full PTT exemption on the first $500,000 of the purchase price if the property's fair market value is $835,000 or less. A partial exemption may still apply for properties valued between $835,000 and $860,000. To qualify, you generally need to be a Canadian citizen or permanent resident, have lived in BC for at least a year prior to purchase, and intend to occupy the property as your principal residence.
• RRSP Home Buyers' Plan (HBP): This federal program allows first-time homebuyers to withdraw up to $60,000 tax-free from their Registered Retirement Savings Plans (RRSPs) to use towards a down payment. If your spouse or common-law partner also qualifies, each of you can withdraw up to $60,000, for a combined total of $120,000. The withdrawn funds must have been in your RRSP for at least 90 days. You then have up to 15 years to repay the amount to your RRSP, starting in the second year after the withdrawal. The HBP can be combined with the FHSA for even greater savings power.
• CMHC Mortgage Loan Insurance: If your down payment is less than 20% of the home's purchase price, you'll generally need mortgage default insurance, often referred to as CMHC insurance (though private insurers like Sagen and Canada Guaranty also offer it). This insurance protects the lender in case you can't make your mortgage payments. The minimum down payment is 5% for the first $500,000 of the purchase price and 10% for any amount above $500,000. CMHC insurance is not available for homes priced at $1.5 million or more. For first-time homebuyers and those purchasing new construction, the maximum amortization period for an insured mortgage can be up to 30 years, an increase from the standard 25 years.

Navigating the Mortgage Landscape: Stress Tests and Renewals

Even with these fantastic savings opportunities, understanding the broader mortgage landscape is crucial.

• Mortgage Renewals: Your mortgage term is a specific period, usually between one to five years, at the end of which you'll need to renew your mortgage. Your lender will send you a renewal statement at least 21 days before your term ends, outlining the balance, interest rate, and new term. [cite: 23, 25,As a mortgage broker in Burnaby, BC, I'm constantly looking for ways to help my clients achieve their homeownership dreams. One of the most significant recent developments for first-time homebuyers in Canada is the new federal GST rebate under Bill C-4. Paired with the First Home Savings Account (FHSA), this initiative offers substantial savings that can make a real difference in affordability.

Understanding the New Federal GST Rebate (Bill C-4)

Buying a newly constructed home typically involves paying Goods and Services Tax (GST) on top of the purchase price. This can add tens of thousands of dollars to your costs. Bill C-4, which received Royal Assent in March 2026, introduces a new federal GST rebate specifically for first-time homebuyers of new builds. [cite: 3, 7, 18]

Here's how it works:

• Full Rebate: If you're purchasing a new home valued at $1 million or less, you can receive a full rebate of the 5% federal GST, potentially saving you up to $50,000. [cite: 7, 13, 14, 17, 18, 19, 20]
• Partial Rebate: For homes priced between $1 million and $1.5 million, the rebate is gradually reduced on a linear basis. [cite: 7, 13, 14, 17, 18, 20] For example, if you buy a home for $1.25 million, you could still receive a rebate of $25,000. [cite: 14, 26]
• No Rebate: Homes valued at $1.5 million or more are not eligible for this rebate. [cite: 13, 14, 20]

This rebate applies to agreements of purchase and sale entered into on or after March 20, 2025, and before 2031. [cite: 3, 7, 14] The best part is that in most cases, the builder will credit you the savings directly at closing, so you don't have to pay the tax upfront and wait for a refund. [cite: 7, 19] This immediate saving can significantly reduce the amount you need to borrow, leading to lower interest payments over the life of your mortgage. [cite: 7]

Who Qualifies for the Rebate?

The eligibility criteria for this new federal GST rebate are specific:

• You must be at least 18 years old. [cite: 3, 7, 21]
• You must be a Canadian citizen or permanent resident. [cite: 3, 7, 21]
• Neither you nor your spouse or common-law partner can have owned and lived in a home as your primary residence in the current calendar year or in the four preceding calendar years. [cite: 3, 7, 13, 14, 21] This is a five-year lookback period. [cite: 14]
• The home must be a newly constructed or substantially renovated property and intended to be your primary place of residence. [cite: 3, 7, 19, 21] Resale properties without substantial renovations do not qualify. [cite: 3, 7]
• You must be the first person to occupy the home as a residence after construction is complete. [cite: 3, 7, 21]
• Investment properties or secondary residences are not eligible. [cite: 3, 14]

It's important to note that if you signed your purchase agreement after March 20, 2025, but closed before March 12, 2026 (when the law officially came into effect), you may still be eligible. In this scenario, you would need to claim the rebate directly through the Canada Revenue Agency. [cite: 7]

Combining with the First Home Savings Account (FHSA)

The FHSA is another powerful tool for first-time homebuyers, and it works exceptionally well with the new GST rebate. Launched in 2023, the FHSA allows you to save for your first home with a unique combination of tax benefits: contributions are tax-deductible (like an RRSP), and qualified withdrawals for a home purchase are tax-free (like a TFSA). [cite: 4, 39]

You can contribute up to $8,000 annually, with a lifetime maximum of $40,000. [cite: 4, 39, 41] Unused contribution room carries forward. [cite: 39] For a couple, this means a potential $80,000 in tax-advantaged savings. [cite: 36] By maximizing both the FHSA and the GST rebate, you can significantly reduce your upfront costs and the overall amount you need to finance.

Other Key First-Time Buyer Programs in BC

While the federal GST rebate and FHSA are fantastic, it's also crucial to be aware of provincial programs and other federal initiatives that can further assist first-time buyers in British Columbia:

• BC Property Transfer Tax (PTT) Exemption: In BC, the Property Transfer Tax is applied to most property purchases. However, qualified first-time buyers can receive a full PTT exemption on the first $500,000 of the purchase price if the property's fair market value is $835,000 or less. [cite: 6, 9, 16, 22] A partial exemption may still apply for properties valued between $835,000 and $860,000. [cite: 6, 22] To qualify, you generally need to be a Canadian citizen or permanent resident, have lived in BC for at least a year prior to purchase, and intend to occupy the property as your principal residence. [cite: 9, 16]
• RRSP Home Buyers' Plan (HBP): This federal program allows first-time homebuyers to withdraw up to $60,000 tax-free from their Registered Retirement Savings Plans (RRSPs) to use towards a down payment. [cite: 4, 5, 8, 11, 12] If your spouse or common-law partner also qualifies, each of you can withdraw up to $60,000, for a combined total of $120,000. [cite: 5, 8, 11, 12] The withdrawn funds must have been in your RRSP for at least 90 days. [cite: 5, 8, 11] You then have up to 15 years to repay the amount to your RRSP, starting in the second year after the withdrawal. [cite: 4, 5, 8, 11, 12] The HBP can be combined with the FHSA for even greater savings power. [cite: 36, 39]
• CMHC Mortgage Loan Insurance: If your down payment is less than 20% of the home's purchase price, you'll generally need mortgage default insurance, often referred to as CMHC insurance (though private insurers like Sagen and Canada Guaranty also offer it). [cite: 28, 37, 38] This insurance protects the lender in case you can't make your mortgage payments. The minimum down payment is 5% for the first $500,000 of the purchase price and 10% for any amount above $500,000. [cite: 28, 34, 35, 38] CMHC insurance is not available for homes priced at $1.5 million or more. [cite: 28, 34, 35] For first-time homebuyers and those purchasing new construction, the maximum amortization period for an insured mortgage can be up to 30 years, an increase from the standard 25 years. [cite: 28, 34]

Navigating the Mortgage Landscape: Stress Tests and Renewals

Even with these fantastic savings opportunities, understanding the broader mortgage landscape is crucial.

• Mortgage Renewals: Your mortgage term is a specific period, usually between one to five years, at the end of which you'll need to renew your mortgage. [cite: 23, 25, 31] Your lender will send you a renewal statement at least 21 days before your term ends, outlining the balance, interest rate, and new term. [cite: 23, 25,

Related mortgage resources

• Explore my free intake for me to review to see where you stand with no obligation.
• Explore my home purchase planning to plan a confident purchase.
• Read Buying a Pre-Sale Condo in Burnaby: A Family Guide to Metro Vancouver Deposits and Mortgages for a related BC mortgage perspective.