As a mortgage broker working closely with homebuyers across Alberta, I’ve been fielding a flood of questions lately about the newly proposed GST rebate for first-time homebuyers. With housing prices continuing to climb—especially in cities like Edmonton and Calgary—this rebate sounds like great news on the surface. But let me be clear: it’s not as straightforward as it seems.

To help clarify what this program actually means, I recently sat down with my colleague Jay, and we broke down the details in a video conversation that’s well worth your time.

What’s Changing?

The old GST rebate program capped out at homes valued at $450,000—a number that hasn’t kept pace with today’s real estate market. “Over the last 20 years, home prices have changed a lot. So that doesn’t really do much anymore,” I explained in our chat.

The new proposal, which was tabled in Ottawa on May 27, 2025, aims to offer a full 5% GST rebate on homes valued up to $1 million, with partial rebates available above that threshold. Importantly, this change hasn’t become law yet, but it’s expected to apply retroactively to purchase agreements signed on or after May 27, once the legislation receives Royal Assent.

How Will It Work?

This is where it gets complicated. “It’s not here yet,” I said, “but if finalized, it will replace the existing rebate system.”

Historically, the rebate is built into the builder’s pricing. The buyer never directly sees the money. So unless the rules change dramatically, that’s still how it’ll function.

Jay added: “There are a lot of buyers that think they’re actually going to reduce the prices of homes by 5%. That isn’t happening.” Builders often price their homes assuming the buyer does qualify for any available rebates. If a buyer doesn’t qualify, they pay the difference.

Not All Buyers Qualify

This new rebate is designed for first-time homebuyers only, using the same criteria as other federal programs. That means you must not have owned or lived in a home—anywhere in the world—owned by you or your spouse in the last four years.

As Jay noted, “Generally, it’s once in a lifetime—not available if your spouse or partner had previously claimed a rebate.” So don’t assume you qualify without checking your recent ownership history.

What About the Retroactive Rebate?

If you’ve already signed a purchase contract on a new home since May 27, you’re likely covered—but how you’ll receive the rebate is still unclear.

“Even CRA has said they’re not totally certain how it’s going to be retroactively applied,” I said. “It might be a tax credit, might be a rebate back to your mortgage lender… what it’s not going to be is cash back to you.” That kind of cash-in-hand rebate would violate Canada’s minimum down payment rules.

Will Prices Drop?

Some hopeful buyers are assuming this rebate will lead to an immediate drop in prices. Not so fast.

“There’s also some fear like, hey, if I buy this home and this program takes effect, am I going to lose 5% of my value automatically?” Jay pointed out. “I don’t think that’s going to happen either.”

In fact, the opposite might occur. Builders are already under pressure from rising supply costs and limited tradespeople. A surge in demand driven by the rebate could push prices higher, not lower.

Should You Wait to Buy?

If you’re sitting on the sidelines waiting for a 5% price drop, you might be waiting forever. “Every situation is different,” Jay said, “but I certainly wouldn’t be on the sidelines if you’re waiting for a rebate from the government.”

What do you do next?

This GST rebate could provide some relief to first-time buyers, but it’s not going to feel like a discount at the sales centre. It’s not a cash windfall, and it’s not going to crash prices. It’s just a tweak to how the government handles taxes on new home purchases—important, yes, but not transformative.

If you’re considering buying a home in Alberta and want clarity about how this affects your mortgage, reach out to me—sooner rather than later. Timing your move right now could be more about market conditions than rebate speculation. Let’s make homeownership in Alberta work for you—rebate or not.

📺 For the full breakdown, check out the video on YouTube.
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