In 2009 the Government of Canada introduced a new tax credit. It is a tax credit designed to assist first-time home buyers with some of the costs that they may incur when purchasing a new home.
As a new home buyer you may be able to claim $5,000 on your tax return. This is a non-refundable income tax credit that can provide up to $750 in federal tax relief.
If you buy your new house with your spouse or common-law partner you can either split the tax credit of $5,000 between each of your returns, or one of you may claim the entire amount.
How to Qualify for the Canadian First Time Home Buyers Tax Credit
To qualify there are several requirements that must be met.
A Qualifying Home
A home located in Canada and purchased after January 27, 2009.
A qualifying home must be registered in your and/or your spouse's or common-law partner's name in accordance with the applicable land registration system in Canada.
It includes existing homes and new construction.
The following are considered qualifying homes:
- single-family houses;
- semi-detached houses;
- mobile homes;
- condominium units; and
- apartments in duplexes, triplexes, fourplexes, or apartment buildings.
A share in a co-operative housing corporation that entitles you to own and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only gives you the right to tenancy in the housing unit does not qualify.
A Qualifying Individual
You can claim the tax credit if:
- You or your spouse or common-law partner purchased a qualifying home, as outlined above.
- You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).
How Do I Claim the Canadian First Time Home Buyers Tax Credit?
When preparing your personal tax return you can claim the $5,000 on Line 369 of your personal return.
If you purchased a home in Canada after January 27, 2009 and you haven’t claimed the tax credit yet, but you now think that you might qualify for the Canadian First Time Home Buyers tax credit (HBTC), contact your Accountant to find out if you can do a retroactive claim, on this year or a previous year’s tax return.
Source of information: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html#q6