Taxes, Rebates and Closing Costs When Buying a Home in Canada

Buying a home comes with more than just a down payment and mortgage approval. Whether you’re purchasing your first home, upgrading to a larger property, buying a newly built home or investing in real estate, understanding taxes and rebates can help you save thousands of dollars.

From GST rebates and land transfer taxes to property tax credits and federal incentives, many buyers are surprised to learn how many costs — and savings opportunities — are tied to a real estate purchase.

Here’s what home buyers in Manitoba should know before closing day.

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 GST Applied to New Build Homes

One of the biggest tax costs associated with buying a newly built home is the federal Goods and Services Tax (GST). In Canada, newly constructed homes are generally subject to 5% GST.

This applies to,

• New build homes
• Condos
• Townhouses
• Duplexes
• Substantially renovated homes
• Owner-built homes
• Some co-op housing purchases

Unlike provinces with Harmonized Sales Tax (HST), Manitoba does not combine provincial sales tax with GST on residential home purchases. That means buyers in Manitoba are typically only paying the federal 5% GST on qualifying new homes.

It’s also important for buyers to understand that GST on new construction homes is often already included in the advertised purchase price. Many builders market homes as “GST included,” meaning the listed price already factors in the federal GST and any applicable builder rebates. However, this is not always the case, especially with custom builds, quick possession homes or certain contracts. Buyers should carefully review the purchase agreement to confirm whether GST is included in the final sale price or added on top at closing.

First-Time Home Buyer GST Rebate

The federal government recently introduced in 2026 a new First-Time Home Buyers’ GST Rebate that can significantly reduce the GST paid on eligible newly built homes.

Eligible buyers may receive,

• A full rebate of the 5% GST on homes priced up to $1 million
• A partial rebate on homes priced between $1 million and $1.5 million
• No rebate on homes above $1.5 million

Potential savings include,

• Up to $30,000 back on a $600,000 home
• Up to $50,000 back on a $1 million home

This rebate applies to many different housing types, including detached homes, condos and custom builds intended as a primary residence.

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 Up to 36% GST New Housing Rebate

Many buyers are surprised to learn that Canada has a GST New Housing Rebate program on new home builds.

Under the current federal rebate,

• Eligible buyers can recover up to 36% of the GST paid
• The maximum rebate is $6,300

This rebate generally applies to,

• Newly built homes
• Condos and townhomes
• Substantially renovated homes
• Owner-built homes used as a primary residence

However, the program has income thresholds based on home price,

• Full rebate eligibility applies to homes priced at $350,000 or less
• The rebate is gradually reduced between $350,000 and $450,000
• Homes priced above $450,000 traditionally do not qualify

Because today’s housing prices have increased substantially over the years, many buyers no longer qualified under this rebate structure — which led to the introduction of the federal GST rebate program for first-time buyers, noted above. Although, there are still homes/condos/townhomes that fall within the price range to qualify for the 

In many builder contracts, this rebate is automatically assigned to the builder and already reflected in the advertised listed price. As a result, buyers may not receive the rebate directly as a cheque after closing because the savings were already credited upfront.

Home Buyers’ Tax Credit (HBTC)

Eligible first-time home buyers may also qualify for the federal Home Buyers’ Tax Credit (HBTC).

The HBTC allows qualifying buyers to claim,

• Up to $10,000 on their tax return
• Approximately $1,500 in tax savings

This credit applies to,

• Existing homes
• New construction
• Condos
• Townhomes
• Mobile homes
• Co-op housing

While this program mainly benefits first-time buyers, certain buyers with disabilities may also qualify even if they previously owned a home.

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Homeowners Affordability Tax Credit (HATC)

Property taxes are another major ongoing cost of homeownership. In Manitoba, homeowners may qualify for the Homeowners Affordability Tax Credit (HATC), which helps reduce annual property tax costs on a principal residence.

Eligible homeowners can receive,

• Up to $1,600 in school tax savings

Unlike the first-time home buyer GST rebate and HBTC, this credit is not limited to first-time buyers. Many homeowners in Manitoba can qualify as long as the property is their primary residence.

The credit is typically applied directly to the property tax bill and claimed during tax season.

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 Land Transfer Tax in Manitoba

One of the most overlooked closing costs when buying a home is land transfer tax, sometimes called land transfer fees.

In Manitoba, land transfer tax is paid when property ownership changes hands and is based on the purchase price of the home.

Manitoba Land Transfer Tax Rates

Current rates are approximately,

• Up to $30,000: No tax
• $30,001–$90,000: 0.5%
• $90,001–$150,000: 1%
• $150,001–$200,000: 1.5%
• Over $200,000: 2%

For example,

• A $400,000 home may result in land transfer tax of roughly $5,650
• A $600,000 home may result in land transfer tax exceeding $9,000

Additional registration and legal fees are usually charged on top of the tax itself.

Unlike some provinces, Manitoba currently does not offer a broad land transfer tax rebate for first-time home buyers.

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Other Closing Costs Buyers Should Budget For

Beyond taxes, buyers should also prepare for several additional closing costs.

Legal Fees

Most buyers will need a real estate lawyer to finalize the transaction, register title and process mortgage documents.

Title Insurance

Title insurance protects against issues related to ownership, fraud or property title defects.

Property Tax Adjustments

Buyers may need to reimburse sellers for prepaid property taxes.

Home Inspections

A professional inspection can help identify costly issues before possession.

CMHC Insurance

If your down payment is under 20%, mortgage default insurance will likely apply.

GST on New Build Upgrades

While Manitoba generally does not charge PST on the home purchase itself, GST may still apply to upgrades, customizations and certain construction-related costs.

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How These Programs Can Work Together

One of the biggest advantages for buyers is that several of these programs can be combined.

For example, an eligible first-time home buyer purchasing a new build home in Manitoba could potentially receive,

• The new federal GST rebate
• The federal Home Buyers’ Tax Credit
• The Manitoba Homeowners Affordability Tax Credit after possession

For example, a qualifying non first-time home buyer could potentially benefit from,

• The federal up to 36% GST New Housing Rebate
• The federal Home Buyers’ Tax Credit
• The Manitoba Homeowners Affordability Tax Credit after possession

Together, these programs could reduce upfront and long-term homeownership costs by tens of thousands of dollars.

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Final Thoughts

Taxes and closing costs can have a major impact on affordability when buying a home. Understanding which taxes apply — and which rebates or credits are available — can help buyers make more informed financial decisions.

Whether you’re purchasing your first home, upgrading to a newly built property or investing in real estate, it’s important to speak with your REALTOR®, mortgage professional, accountant and lawyer to fully understand the costs associated with your purchase.

A well-planned purchase doesn’t just help you buy a home — it helps you keep more money in your pocket after closing day.

Tara Zacharias, REALTOR®