Ottawa's GST rebate on new homes would save typical 1st-time buyer $27K: PBO

The parliamentary budget officer says Ottawa's plan to slash the sales tax on housing would save an eligible first-time homebuyer an average of roughly $27,000 off the price of a newly built home.

The federal government's fiscal watchdog predicts in a new analysis that a little over 71,000 new builds will quality for GST relief over the lifetime of the program.

The proposal would see the federal portion of the sales tax eliminated on a new home worth up to $1 million if it's bought by a qualifying first-time homebuyer.

The GST rebate would be phased down as the price of the home approaches $1.5 million.

The PBO forecasts the program will cost $1.9 billion over six years, while the federal government has pegged the price tag closer to $3.9 billion.

The GST rebate, which is not yet law, was included in the Liberals' spring election platform as a way to help Canadians break into the housing market.