First Time Home Buyers' Tax Credit
The First Time Home Buyers' Tax Credit was introduced in 2009 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.
Until 2022, the Home Buyers' Tax Credit, at current taxation rates, worked out to a rebate of $750 for all first-time buyers. However, in the 2022 budget, the rebate amount was doubled to $1,500. 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 $1,500 for 2022 and all subsequent tax years (or $750 for 2021 and prior tax years).
To receive your $1,500 claim, you must include it with your personal tax return under Line 31270 of your Schedule 1 (previously line 369 on your income tax return).
How do you qualify for the First Time Home Buyers' Tax Credit?
In order to be eligible for the First Time Home Buyers' Tax Credit, your home must meet the following requirements:
- Be within Canada
- Be an existing or new home
- Be a single, semi, townhouse, mobile home, condo, or apartment
- Can include a share in a co-operative housing corporation that gives you possession of the home
- You must intend to occupy the home within one year of purchase
In order to be eligible for the First Time Home Buyers' Tax Credit, your home must meet the following requirements:
- You or your spouse must purchase a qualifying home
- The home must be registered in either your name or your spouse's name
- You cannot have owned a home in the previous four years
- You cannot have lived in a home owned by your spouse in the previous four years
- You must present documents supporting the purchase of the home
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Home Buyers' Tax Credit for people with disabilities
If you have a disability and are purchasing a home, you do not need to be a first-time homebuyer to claim the Home Buyers' Tax Credit, where a person with a disability is defined as a person who can claim a disability amount on their tax return in the year the home is purchased. The Home Buyers' Tax Credit can be claimed if the home purchased is suitable for the disabled person's needs, and the disabled person occupies the home within one year from the date of purchase.
Land transfer tax rebate for first-time homebuyers
Another tax credit available to first-time homebuyers in Ontario, British Columbia, and Prince Edward Island is the land transfer tax rebate. Each province has its own rules about who is eligible to claim the land transfer tax rebate. The amount of the rebate depends on which province you live in, the value of the home, and whether one or both buyers has owned a home before.
First-time homebuyers in the City of Toronto can also get a rebate of up to $3,725 on the municipal land transfer tax as long as they meet the necessary criteria. This rebate is applicable whether you're buying a Toronto townhouse, condo or house.
GST/HST new housing rebate
If you buy your home before it’s built, or if you substantially renovate an existing home, you could qualify for a rebate a portion of the sales tax. The amount of the GST/HST new housing rebate depends on the purchase price of the home, and can only be claimed if the net purchase price is $450,000 or less. While this rebate is often taken advantage of by first-time buyers, this rebate is available to all Canadians who qualify regardless of whether they’ve owned a home before.
First-time homebuyer education topics
- RRSP Home Buyers' Plan
- Land Transfer Tax Rebate
- First-time homebuyer programs
- First-time homebuyer grants
- First-time homebuyer loans
References and Notes
- First-Time Home Buyers' Tax Credit (HBTC), Canada Revenue Agency, 2022-05-19
- 2009 First-Time Home Buyers' Tax Credit, Stephen H. Shub Professional Corporation, 2008-01-01
- Fact Sheet: First-Time Home Buyers' Tax Credit, Canada Revenue Agency, 2010-02-25
- The First-Time Home Buyers' Tax Credit, Meredith Norton - Remax Shuawap Realty, 2009-02-26