Budget 2025: Opportunities And Risks For Canadian Homeowners

Setting the scene: Budget 2025 lands

On November 4, the federal government released its latest budget 2025. Housing sits at the centre of it all. More homes, lower costs, clearer rules. For anyone buying their first home, upgrading, or simply holding a home, this budget matters.
 But the real question is, how much will it matter, and when?

In this blog we will walk through:

• What the budget proposes for housing
• What it means for first-time buyers
• What it means for current homeowners and investors
• The big opportunities and hidden risks
• Your action plan for the year ahead

What the budget actually proposes for housing

Here are the major housing related moves in Budget 2025.

GST relief for new build home buyers

The government is proposing to remove the Goods and Services Tax (GST) on newly built homes up to 1 million dollars for eligible first-time buyers. A reduced benefit applies for homes up to 1.5 million dollars.

This can translate into tens of thousands of dollars in savings and significantly lowers upfront costs for buyers entering the market.

Supply side and infrastructure support

• The annual issuance limit for the Canada Mortgage and Housing Corporation’s Canada Mortgage Bond program will rise from 60 billion dollars to 80 billion dollars starting in 2026. This is intended to support more financing for multi-unit housing projects.
• A new Build Communities Strong Fund with roughly 51 billion dollars over ten years will help provinces and municipalities upgrade roads, water systems and local infrastructure that allows more housing to be built.
• There are continued commitments to supportive housing and Indigenous housing, although many delivery details remain unclear.

Other relevant changes

• The government has proposed repealing the Underused Housing Tax for many non-resident owners starting in 2025.
• There are small personal tax improvements for middle-income Canadians, which may slightly improve mortgage qualifications.
• Industry groups note that the budget does not include strong support for the missing middle, such as townhomes and semi-detached housing.

How this impacts first-time home buyers

If you are stepping into the market for the first time, Budget 2025 brings both advantages and things to watch for.

The opportunity

• If you qualify as a first-time buyer and you purchase a newly built home, the GST removal is a real financial benefit. Lower tax out of pocket means better affordability.
• Improved take-home income from tax adjustments may help you qualify for a slightly higher mortgage.
• Increased supply over time may help moderate price growth, especially in high-demand regions.

The caveats

• The GST relief applies only to new builds. Buyers searching in resale-heavy markets may not benefit directly.
• Many new builds in major cities fall above the 1 million dollar threshold, which limits the full benefit.
• Supply improvements take time. Infrastructure funding does not produce homes overnight.
• Builders may increase prices if demand rises, which means the intended savings can be absorbed by the market.
• Local zoning rules and development charges still shape affordability more than federal policy in many regions.

What this means for you

If you fit the first-time buyer plus new build profile, this budget gives you a strategic advantage. However, strong preparation still matters. Evaluate your region, understand the eligibility rules and compare new build pricing carefully. The opportunity is real, but so is competition.

How this affects homeowners and investors

If you already own a home or you are exploring investment opportunities, the effects of Budget 2025 are more subtle but still important.

Homeowners

• If you are staying in your current home, the budget does not drastically change your situation. There is no direct tax break for existing homeowners.
• If your neighborhood is due for infrastructure upgrades, you may see higher desirability and value over time.
• Increased supply from new multi-unit construction could moderate the rapid price growth of detached homes in certain suburbs.

Investors and developers

• Developers who focus on multi-unit or rental housing may benefit from increased CMHC bond financing and infrastructure support.
• Some industry voices warn that the budget could shift activity away from single-family construction, which could affect jobs in that segment.
• The repeal of the Underused Housing Tax simplifies compliance for some non-resident and investment property owners.
• Investors considering new builds should evaluate timelines, rental demand, and local zoning updates.

Big opportunities and watch points

Opportunities

• First-time buyers targeting new builds under the threshold can secure meaningful tax savings.
• Homeowners in areas slated for infrastructure upgrades may see long-term value growth.
• Investors shifting toward multi-unit or missing middle housing may be well positioned for future demand.
• Less tax complexity for certain investors can make planning cleaner.

Watch points

• Demand incentives without short-term supply increases can push prices up.
• Affordability challenges remain due to land cost, municipal fees, and zoning delays.
• Federal plans still depend on provincial and municipal execution.
• Increased density in certain areas may affect neighborhood character and future home values.
• Investors must still navigate interest rates and evolving rental market dynamics.

Your action plan: What you should do now

Here are practical steps for buyers, owners and investors:

• Check eligibility. If you are a first-time buyer, confirm that your chosen home qualifies and the price fits within the thresholds.
• Research your local market. Look at new build availability, pricing and timelines.
• Calculate your full cost. Down payments, interest rates, insurance and closing fees matter more than tax savings alone.
• Monitor local policy. Municipal zoning changes and development charges can offset federal benefits.
• Be realistic with timing. The homes funded by these policies may take years to enter the market.
• Plan for flexibility. Markets move. Builders adjust prices. Interest rates change. Keep your financial plan adaptable.

Final Thoughts

Budget 2025 sends a clear message: housing is a national priority. First-time buyers of new homes under one million dollars stand to benefit the most. Homeowners and investors also have new dynamics to watch closely, especially around supply and neighborhood growth.

However, it is not a complete affordability fix. Local markets and builder behavior will determine how much of the budget’s promise becomes reality.

For buyers, owners and investors, the most important move now is simple: understand your market, prepare early and make informed decisions.

At Pegasus Lending, we help Canadians make sense of housing market shifts, from policy changes to mortgage planning and refinancing options.

Contact us to start your home journey with Pegasus Lending and explore solutions designed to help you move forward with confidence.