Canada Housing Market

February 28, 2026

Canada is one step closer to launching a major housing affordability measure that could significantly reduce the cost of buying a newly built home.

On February 26, 2026, Bill C-4 – formally titled the Making Life More Affordable for Canadians Act – passed third reading in the Senate. The bill now returns to the House of Commons for consideration of Senate amendments before receiving Royal Assent.

If finalized, eligible first-time buyers could recover up to $50,000 in federal GST on qualifying new homes.

What Bill C-4 Means for First-Time Buyers

Bill C-4 amends the Excise Tax Act to introduce a temporary enhanced GST rebate for first-time home buyers purchasing newly constructed or substantially renovated homes.

Key details:

• Eliminates the 5 percent federal GST on qualifying new homes
• Full rebate available on homes priced up to $1 million
• Maximum federal rebate capped at $50,000
• Partial rebate phases out between $1 million and $1.5 million
• No rebate available above $1.5 million

For example:

A first-time buyer purchasing a $1.25 million newly built home – the midpoint of the phase-out range – would receive approximately 50 percent of the maximum rebate, or $25,000.

This is a substantial increase compared to the existing federal GST new housing rebate, which currently caps at $6,300.

Important Timeline Update

An amendment adopted during committee review backdated eligibility.

The rebate applies to agreements of purchase and sale entered into after March 19, 2025.

Additional conditions:

• Construction must begin before 2031
• The home must be substantially completed before 2036

This means buyers who signed qualifying agreements earlier in 2025 may still be eligible.

Where the Bill Stands Now

Bill C-4 has completed:

• House of Commons third reading – December 11, 2025
• Senate third reading – February 26, 2026

It is currently back before the House of Commons for consideration of Senate amendments.

Once the House accepts those amendments, the bill will proceed to Royal Assent and become law.

Given broad parliamentary support throughout its legislative journey, observers expect this final stage to move quickly.

Who Qualifies?

To receive the enhanced GST rebate, buyers must meet all of the following criteria:

First-Time Buyer Requirements

• Must be at least 18 years old
• Must be a Canadian citizen or permanent resident
• Must not have owned and lived in a home – personally or through a spouse/common-law partner – in the calendar year of purchase or the previous four calendar years
• Must not have previously received this enhanced first-time GST rebate

Property Requirements

• Home must be newly constructed or substantially renovated
• Must be used as the buyer’s primary residence
• Cannot be a resale property without substantial renovation
• Cannot be an investment or rental property

Eligible property types include:

• Detached homes
• Semi-detached homes
• Townhouses
• Condominium units
• Modular and mobile homes
• Floating homes

What About Ontario’s HST Rebate?

Ontario already offers a provincial new housing rebate of up to $24,000 under existing rules for eligible buyers.

There have been public discussions about additional provincial matching measures, but as of this publication, no new Ontario legislation expanding the rebate beyond current provincial limits has received Royal Assent.

Buyers should verify eligibility through official Ontario Ministry of Finance and Canada Revenue Agency guidance once the federal bill becomes law.

How the Rebate Will Work

Once Bill C-4 receives Royal Assent:

• The Canada Revenue Agency will release updated forms and guidance
• Eligible buyers will apply for the rebate after closing
• In many builder transactions, the rebate may be credited at closing and assigned to the builder

Detailed CRA procedures are expected shortly after final approval.

Market Impact: What This Signals for Ontario

This measure arrives during a period of slower housing activity across Ontario and the GTA.

If enacted quickly, the enhanced rebate could:

• Stimulate demand in the new construction market
• Support first-time buyers facing affordability pressure
• Improve pre-construction sales confidence
• Provide relief in higher-cost Ontario urban markets

However, because the rebate only applies to newly built homes and phases out above $1.5 million, resale markets will not benefit directly.

The true impact will depend on buyer confidence, mortgage rates, and broader economic conditions.

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References

Parliament of Canada. (2026). Bill C-4 – Making Life More Affordable for Canadians Act. Retrieved from https://www.parl.ca

Senate of Canada. (2026, February 26). Bill C-4 third reading proceedings. Retrieved from https://sencanada.ca

Government of Canada. (n.d.). GST/HST new housing rebate. Canada Revenue Agency. Retrieved from https://www.canada.ca

Ontario Ministry of Finance. (n.d.). Ontario new housing rebate information. Retrieved from https://www.ontario.ca

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