Only 150 applications had been approved for the federal government’s new first-time homebuyer GST rebate as of June, despite the Canada Revenue Agency having received approximately 7,500 applications, according to federal data. Finance Minister François-Philippe Champagne said the government will examine the slow pace of applications being processed and approved. The figures were released in response to an order-paper question from Conservative deputy leader Melissa Lantsman.
The federal program is designed to eliminate the GST on newly built or substantially renovated homes valued at up to $1 million for eligible first-time buyers. For homes priced between $1 million and $1.5 million, the rebate is gradually reduced. Eligible buyers can receive a maximum rebate of $50,000. The rebate became available after the legislation received Royal Assent in March 2026. The CRA began accepting applications shortly afterward, allowing eligible buyers to seek a refund of GST or the federal portion of HST paid on qualifying homes. The program generally applies to eligible purchase agreements entered into on or after March 20, 2025, and before 2031. Buyers must meet specific first-time homebuyer requirements and the property must generally be newly built or substantially renovated and used as the buyer’s primary residence. The slow approval rate has raised questions about the processing capacity of the federal tax agency. The CRA currently says it is dealing with a higher-than-usual volume of housing rebate applications and processes claims on a first-in, first-out basis.
Since May 11, the agency has advised applicants to allow approximately 120 days for processing. In some cases, payments can take longer because claims may be subject to additional review or audit. The federal government introduced the rebate as part of broader measures aimed at reducing the upfront cost of homeownership and encouraging the construction of new housing. Finance Canada estimates the measure could provide about $3.9 billion in tax savings over five years, beginning in 2025-26. For eligible buyers purchasing a new home priced at or below $1 million, the measure can effectively remove the federal GST component, subject to the program’s eligibility requirements. A home priced at $1.25 million, for example, would qualify for a reduced rebate rather than the full $50,000 amount. The federal government is now facing scrutiny over the gap between the number of applications received and the number approved. Champagne said the government will look into the issue as questions continue about how quickly eligible first-time buyers are receiving the promised tax relief. The CRA continues to accept applications, and applicants are advised to ensure that all required documents and information are submitted to avoid additional processing delays.