The First-Time Home Buyers Tax Credit (HBTC) is a non-refundable tax credit for eligible home buyers who buy a qualifying home after January 27, 2009. If you have a disability or are buying a home for a relative with a disability, you do not have to be a first-time home buyer.
The value of the HBTC is based on $5,000 multiplied by the lowest federal income tax rate for the year. In 2013 the lowest federal income tax rate was 15%, and it remains the same in 2014, so the value of the HBTC would be $750.
Who is Eligible for the First-Time Home Buyers Tax Credit?
You, and anyone you purchase the home with must be considered a first time home buyer to be eligible for the tax credit. The home must be used as your principal residence, and if you purchase with your spouse, common-law partner, or even a friend, then either one of you can claim the credit (or share it). However, the combined total cannot exceed $750.
What is a qualifying home?
To qualify for the HBTC, a home must be a housing unit located in Canada, including mobile homes, condominiums, and apartments. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
Also, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.
How to Claim the First-Time Home Buyers Tax Credit?
You claim the HBTC On Schedule 1 when you file your Canadian income tax return. For more details. see Home Buyers’ Amount from the Canada Revenue Agency.
The home must be registered in your or your spouse's or common-law partner's name in accordance with the applicable land registration system. Claimants should ensure that documentation supporting the purchase transaction is available if requested by the Canada Revenue Agency. Claimants are also responsible for making sure that all applicable eligibility conditions are met.
Keep the HBTC in mind when you consider buying a Canadian home. It’s just another great reason to take the final step of real estate home ownership.