The Federal Government introduced the first-time homebuyers’ tax credit in the 2009 Federal Budget.
The non-refundable tax credit is based on an amount of $10,000 for first-time homebuyers who acquire a qualifying home. This rebate is equivalent to $1,500.
Budget 2022 Update: The recently announced federal budget proposes to increase this tax credit. The First-Time Home Buyers’ Tax Credit has been doubled from $5,000 to $10,000. This increase means first-time home buyers now get up to $1,500 back at tax time (a $750 increase), and it applies to homes purchased on or after January 1, 2022.
How Much Is The Home Buyers’ Tax Credit?
The home buyers’ tax credit is calculated using the lowest personal income tax rate for the year (i.e. 15% in 2023).
Therefore, for homes purchased in 2023, you will get a credit of $1,500 (calculated as $10,000 x 15%) when you file your taxes next year.
Related: How To Buy a Home in Canada
Eligibility Rules for the Home Buyers’ Tax Credit
The following are required to be eligible for the first-time home buyers’ tax credit:
- You or your spouse or partner acquired a qualifying home. A qualifying home is a housing unit located in Canada and acquired after January 27, 2009. It may be new or existing.
- You or your spouse must be considered a first-time homebuyer. You are considered a first-time home buyer if you or your spouse have not owned or lived in a home owned by either of you for the four years before acquiring the new home.
- The home must be used as your principal residence, and you must intend to live there no later than one year after purchase.
- You, your spouse, partner, or a friend with whom you bought the home can claim the full credit, or you can share it. The total combined claim cannot exceed $1,500.
Claiming Your Home Buyers’ Tax Credit
You can claim the tax credit on your personal income tax return in line 369 of Schedule 1 of your Federal Tax form. See Canada Revenue Agency for more information on the HBTC.
Other First-Time Home Buyer Rebates
B. Land Transfer Tax Rebate
Land transfer tax rebates are available for first-time homebuyers in some Canadian provinces, including Prince Edward Island, British Columbia, and Ontario.
The rebate amount depends on several factors such as home purchase amount, residency status of the buyer, qualification as a first-time homebuyer, use as a principal residence, etc.
C. GST/HST New Housing Rebate
This rebate applies to you if you build or purchase a new home or if you renovate an existing home that is your primary residence extensively.
The rebate applies to the GST/HST paid on the purchase and is available to all Canadians, even if they are not first-time home buyers.