The first-time home buyers’ tax credit was introduced by the Federal Government in the 2009 Federal Budget. The non-refundable tax credit is based on an amount of $5000 for first-time home buyers who acquire a qualifying home.
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 2018). Therefore, for homes purchased in 2018, you will get a credit of $750 (calculated as $5000 x 15%) when you file your taxes next year.
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 home buyer. You are considered a first-time home buyer if you or your spouse have not owned or lived in an home owned by either of you for the four years prior to acquiring the new home.
- The home must be used as your principal place of residence and you must intend to live there no later than one year after purchase.
- You, your spouse, partner or friend with whom you bought the home can claim the full credit or you can share it. The total combined claim cannot exceed $750.
Claiming Your Home Buyers’ Tax Credit
You can claim the tax credit on your personal income tax return under 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 available include:
B. Land Transfer Tax Rebate
Land transfer tax rebates are available for first-time home buyers 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 home buyer, use as principal residence, etc.
In Ontario, the maximum refund possible doubles to $4,000 starting on January 1, 2017.
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.