The First-time Home Buyers' Tax Credit was introduced as part of 'Canada's Economic Action Plan' to assist Canadians in purchasing their first home. It is designed to help recover closing costs such as legal expenses, inspections, and land transfer taxes.
The Home Buyers' Tax Credit, at current taxation rates, works out to a rebate of $750 for all first-time buyers. After you buy your first home, the credit must be claimed within the year of purchase and it is non-refundable. In addition, the home you purchase must be a 'qualified' home, described in more detail below. If you are purchasing a home with a spouse, partner or friend, the combined claim cannot exceed $750.
To receive your $750 claim, you must include it with your personal tax return under line 369.
How Do You Qualify?
You can claim $5,000 for the purchase of a qualifying home in the year if BOTH of the following apply:
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you or your spouse or common-law partner acquired a qualifying home
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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)
A qualifying home must be registered in your or your spouse's or common-law partner's name in accordance with the applicable land registration system and it must be located in Canada. It includes existing homes and homes under construction.
The following are considered qualifying homes:
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single-family houses
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semi-detached houses
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townhouses
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mobile homes
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condominium units
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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.
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.
Persons With Disabilities
You do NOT have to be a first-time home buyer if either of the following applies to you:
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you are eligible for the disability tax credit
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you acquired the home for the benefit of a related person who is eligible for the disability tax credit
The purchase must be made to allow the person with the disability to live in a home that is more accessible or better suited to their needs. For the purposes of the home buyers' amount, a person with a disability is a person who is eligible for the disability tax credit for the year in which the home is acquired.
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.