Carney Government Eliminates GST for First-Time Homebuyers, Pledges to Tackle Housing Crisis

EDMONTON — The federal government is eliminating the Goods and Services Tax (GST) for first-time homebuyers purchasing homes under $1 million, Prime Minister Mark Carney announced Thursday, marking the government’s first major move to address Canada’s deepening housing crisis.

The policy aims to reduce upfront costs for buyers and encourage housing construction by removing GST charges that can amount to tens of thousands of dollars. According to the government, first-time buyers could save up to $50,000 under the new measure.

“Canadians will face lower upfront housing costs and keep more money in their pocket,” the Prime Minister’s Office stated in a release. The federal government anticipates that the tax cut will not only help young people and families enter the housing market but also stimulate new housing development across the country.

So many Canadians are doing everything right. They’ve worked hard, secured good jobs, and saved for the future. But often, it’s not enough to buy a home.

It shouldn’t be this way. So we’re making it easier to buy your first home — and removing the GST on homes up to $1 million. pic.twitter.com/7gkDOipRJM

— Mark Carney (@MarkJCarney) March 20, 2025

Carney, who was elected last year, has made housing affordability a key priority. Thursday’s announcement signals the beginning of what the government says will be a broader suite of policies to expand housing supply and address affordability head-on.

“We will announce a series of new measures to increase housing supply shortly,” Carney said in a statement. “It’s time for focused action to solve the housing crisis, and it’s time to build a Canada you can afford.”

The announcement comes amid record-high home prices in many Canadian cities, including Toronto, where average home prices remain well above national averages and supply continues to lag behind demand.

Further details on implementation, including when the GST exemption will take effect, are expected in the coming weeks.

GTA Today will continue to follow developments on the federal housing strategy.