How the GST Credit Really Works for New Homes in Alberta (And Why It Matters Right Now)

Jul 29

Renee Huse, founder of Spire Mortgage Team in Alberta, has helped hundreds of first-time buyers through tricky timing decisions. But we’ve never seen a scenario quite like this.

Right now in Alberta, there’s a brand-new GST rebate promised for buyers of newly built homes—but here’s the catch: it hasn’t actually become law yet.

This means you could be eligible to save up to $50,000 on your home purchase, but depending on when you take possession, you’ll either:

Get that rebate applied directly by your builder
OR have to come up with the extra funds upfront and apply on your own to CRA for the refund later

This can change your entire approval strategy.

What Is the New GST Rebate?

If you’re a first-time buyer and you’re purchasing a newly built home in Alberta, the federal government has announced a huge incentive: they’re planning to remove the 5% federal GST on homes under $1 million.

The First-Time Home Buyer GST/HST Rebate will generally be available if the agreement of purchase and sale for the home is entered into with the builder on or after May 27, 2025 and before 2031.

So if you’re buying a $650,000 home in Alberta, that could mean up to $32,500 in savings.

And for homes priced between $1 million and $1.5 million, the GST would be partially reduced.

It’s called the First-Time Home Buyer GST/HST Rebate, and it’s meant to make new construction more affordable for Canadians entering the market.

Who Is Eligible?

You may be eligible to claim the First-Time Home Buyer GST/HST Rebate if all of the following apply:

You meet the normal eligibility rules for the GST/HST new housing rebate, or you would meet them if the price limit were increased to $1.5 million (which is what this new program proposes).
You entered into a purchase agreement with a builder on or after May 27, 2025 and before 2031, and you’ll take ownership before 2036.
The home is your primary residence, not a rental or second property.
The home is newly built or substantially renovated, and construction starts before 2031 and finishes before 2036.
In the case of an owner-built home, construction or renovation starts on or after May 27, 2025 and before 2031.
You’re a first-time home buyer and the first person to occupy the home.
You have never received or been deemed to have received this GST rebate before.

If you’re not sure whether your home qualifies, or if your builder hasn’t clearly explained it—reach out. This is where a strategic mortgage plan can prevent a five-figure surprise at closing.

Here’s the Problem: The Law Isn’t In Place Yet

This rebate was announced by the federal government. But a government announcement doesn’t automatically make something official.

Before any new law can be enforced in Canada, it needs to be passed by Parliament and then receive what’s called Royal Assent. That’s the final stamp of approval that makes a bill legally binding.

Here’s the timeline:

The rebate was introduced in spring 2025
Parliament closed for the summer before they had time to finalize the law
The bill will sit dormant until Parliament returns in fall 2025

So right now, the rebate is not officially in effect. Builders can’t apply it, and buyers can’t claim it. All we have is a public promise and a draft law waiting in line.

What Happens If You Buy Now?

Let’s say you’re buying a new home in Calgary, Airdrie, Red Deer, or anywhere else in Alberta this summer. Here’s what will determine how the GST rebate affects you:

Your Possession Date Is the Key

If you take possession of your home before the rebate becomes law, you will:

Pay GST in full at closing (5% on your total purchase price)
Then wait until CRA opens the application process
Apply for the rebate yourself
Get the rebate back as a refund months after closing

But if your possession is after the rebate becomes law, your builder can:

Credit you the rebate directly on the closing documents
Reduce your total purchase price
Lower your mortgage amount and your monthly payments

Real Alberta Case Study: Michelle in Airdrie

Michelle is a registered nurse buying her first home—a pre-construction duplex in Airdrie.

Purchase Price: $650,000
Builder: Included a clause offering a GST credit if the law passes in time
Closing Date: November 2025

Michelle’s challenge? No one knows exactly when Parliament will finalize the rebate.

If she closes before the rebate becomes law, she needs to pay the GST upfront—an extra $32,500 out of pocket. She can apply for the refund later, but that doesn’t help her qualify for a mortgage right now.

If the law passes before November and her builder can apply the credit directly, her down payment and mortgage amount drop immediately, making her mortgage easier to qualify for.

This is exactly where a strategic mortgage plan matters.

💰 Builder Credit vs. Client Applies for Rebate

Let’s look at the real math using Alberta-specific numbers.

Scenario	Builder GST Credit	Client Applies for Rebate
Purchase Price	$650,000	$682,500
Minimum Down Payment	$40,000	$43,250
Mortgage Amount	$634,400	$664,820
Monthly Mortgage Payment (4.09%)	$3,419	$3,588
Estimated Property Taxes	$387	$387
Heat	$200	$200
Total Monthly Housing Cost	$4,006	$4,175
Required Gross Household Income	$123,200	$128,300

What This Means for Alberta Buyers

Upfront Cash Needed: $3,250 more down payment if GST is included
Monthly Payments: $189/month higher without the builder credit
Income Requirement: $5,900/year more gross household income needed to qualify for the mortgage

Even though you’ll eventually get the rebate either way, it doesn’t help you get approved today.

That’s why we recommend qualifying based on the full GST upfront. If the rebate is approved before your possession, great—your mortgage will drop. If not, you’re still protected.

Glossary

GST (Goods and Services Tax): A 5% federal tax applied to new homes in Alberta.
Royal Assent: The final legal step to make a new law official in Canada.
Builder Credit: When your builder applies the rebate directly to your purchase price.
CMHC Premium: Mortgage insurance fee added to mortgages when buyer have less than 20% down payment.
GDS (Gross Debt Service): A ratio lenders use to measure your housing cost versus your income.
Possession Date: The day you officially take ownership of your new home.

FAQs

Q: Is the GST rebate available now?
No. We expect more clarity after Parliament resumes in fall 2025.

Q: Can my builder credit me the GST today?
Only if your possession date is after the law is passed.

Q: What if I take possession before the rebate becomes law?
You’ll pay the full GST, then apply to CRA for the rebate later.

Q: Should I wait to buy until the rebate is official?
Not necessarily. If you qualify now, it’s often better to act before prices or rates rise.

Q: Will I still get the rebate if I buy now?
Yes, assuming the legislation passes. You’ll just apply yourself instead of receiving a builder credit.

Give us a call or fill out an application at this link: https://spiremortgage.ca/apply-now and our team will get in touch with you to start building a plan that suits you.

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Written by the Spire Mortgage Team, Alberta’s strategic mortgage planning experts.
Learn more: https://spiremortgage.ca

Renee Huse