First-Time Home Buyers’ Tax Credit (HBTC)
The First-Time Home Buyers’ Tax Credit (HBTC) is a non-refundable tax credit. Its intentions are to help first time buyers cover costs associated with purchasing a home. The HBTC is part of Canada’s “Economic Action Plan” and starting in 2009, can be claimed on your personal income tax return by entering $5,000 on line 369 of your Schedule 1, Federal Tax.
The First-Time Home Buyers’ Tax Credit should be claimed in the year of the property purchase, and the credit is non-refundable. The HBTC is available for claims from individuals, joint claims with a spouse or common-law partner, or a friend or family member. The max combined claim is $5,000.
You can calculate the tax credit by multiplying your lowest personal income tax rate for the year by $5,000. For example, in 2009 the lowest personal income tax rate was 15%. $5,000 multiplied by 15% equals a total credit of $750.
Do you qualify?
To qualify for the tax credit, the applicant(s):
- Can not have owned a home within the last 4 years.
- Must not have lived in a home that any co-applicants have owned within the last 4 years.
- Have to register the property in the name of the applicant(s).
- Need documents that support the purchase of the property when requested by Canada Revenue Agency (CRA).
To claim the HBTC, the property must be a ‘qualifying’ home. To qualify, the home:
- Has to be located in Canada.
- Must be occupied by the applicant(s), or a relative with a disability, within 1 year of purchase.
- Has to be single-family home, semi-detached home, townhouse, mobile home, condominium, apartment, duplex, triplex, or fourplex.
Shares in co-operative housing corporations qualify if the co-op gives you the right to own the unit; those that only provide the right of tenancy do not qualify.
HBTC for people with disabilities
For those with disabilities, the applicant need not be a first-time home buyer. If you have disabilities and want to qualify, you need to use the same definition as when claiming disabilities for tax purposes. When claiming a disability amount, it has to be in the same year of the property purchase. You can be eligible to claim a disability amount should the costs be ignored for attendant care, too. Lastly, you can qualify for care in a nursing home claimed for Medical Tax Credit.
For more information about the First-Time Home Buyers’ Tax Credit, visit one of the following government resources: