How Is the New 2025 GST/PST Rebate Calculated for First-Time Home Buyers?

Learn how the 2025 GST/PST new housing rebate is calculated with exact formulas, phase-out thresholds, and 5 real-world examples at different price points.

# How Is the New 2025 GST/PST Rebate Calculated for First-Time Home Buyers? When you buy a **newly built home** in Ontario, you pay **13% HST**. Here's the breakdown: | Component | Rate | On a $700K home | | --- | --- | --- | | Federal GST | 5% | $35,000 | | Ontario Provincial | 8% | $56,000 | | **Total HST** | **13%** | **$91,000** | > **Important:** HST only applies to **new construction** and **substantially renovated homes**. Resale homes are HST-exempt. ## The "True Base Price" — Why Advertised Prices Are Misleading Most Ontario builders **assign the existing $24,000 Ontario rebate** to themselves at closing. The advertised price is actually the **net price** after the rebate has been subtracted. ### The Formula **True Base Price = (Advertised Price + $24,000) ÷ 1.13** For an advertised price of **$700,000**: | Step | Calculation | Result | | --- | --- | --- | | Add back assigned rebate | $700,000 + $24,000 | $724,000 | | Divide by 1.13 | $724,000 ÷ 1.13 | **$640,708** | ## Federal GST Rebate (Bill C-4) - **Full rebate** (100% of GST) for homes up to **$1,000,000** - **Phase-out** from $1M to $1.5M using: Rebate × (1 - ((Price - $1M) / $500K)) - **No rebate** above $1.5M ## Ontario Provincial HST Rebate (New) For **first-time buyers only**, Ontario proposes rebating the full 8% provincial portion: - Full rebate for homes up to **$1,000,000** - Maximum rebate: **$80,000** ## Real-World Examples | Price | GST Rebate | Ontario Rebate | Existing Ontario | **Total Savings** | | --- | --- | --- | --- | --- | | $500K | $25,000 | $40,000 | — | **$65,000** | | $700K | $35,000 | $56,000 | — | **$91,000** | | $1M | $50,000 | $80,000 | — | **$130,000** | | $1.25M | $25,000 | $56,000 | $24,000 | **~$105,000** | | $1.5M+ | $0 | $0 | $24,000 | **$24,000** | ## Key Takeaway The combined federal and provincial rebates represent the largest housing affordability measure in Ontario's recent history.

First-time buyers purchasing new homes at or below $1M can save up to **$130,000** — a game-changer for affordability.

Published by Circle Real Estate Brokerage — Toronto & GTA pre-construction and resale experts.