Buying a home is a big investment and can be a daunting financial endeavour, however, there are programs available to help make this purchase easier for homebuyers. The First Time Home Buyer’s Tax Credit was introduced in 2009 and gives you that little extra come tax time after buying your first home!
First-Time Home Buyer’s Tax Credit (HBTC)
Tax credits provide a direct reduction in your tax liability. For example, if your credit is 100, the tax credit will reduce your tax liability by $100. The First-Time Home Buyer’s Tax Credit can be used for a qualifying home, and fortunately, a variety of homes meet the definition. Qualifying homes include single-family homes, townhouses, mobile homes and apartment buildings. According to the Canada Revenue Agency, you will qualify for the HBTC if:
- you or your spouse or common-law partner acquired a qualifying home, and
- 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.
An interesting fact to note is that if you are a person with a disability or are purchasing a house for a person with a disability that you are related to, you don’t have to be a first-time home buyer. However, the home must be acquired to enable the person with the disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
The HBTC is calculated by taking by multiplying the lowest personal tax rate for the current tax year and multiplying it by $5,000. Using the 2014 tax year, the credit would be (15% multiplied by $5,000), or $750.
If you’re a First Time Home Buyer and are ready to purchase your first home, get in touch with me today! I’ll help make your first home buying experience a breeze.