Dateline: 07/09/09
One of the measures included in the 2009 federal budget is a First-Time Home Buyers Tax Credit (HBTC) designed to encourage investment in Canadian housing.
The First-Time Home Buyers Tax Credit (HBTC) is a non-refundable tax credit for eligible home buyers who buy a qualifying home after January 27, 2009. If you have a disability or are buying a home for a relative with a disability, you do not have to be a first-time home buyer.
Value of the Home Buyers Tax Credit
The value of the Home Buyers Tax Credit is based on $5000 multiplied by the lowest income tax rate for the year. In 2009 the lowest income tax rate is 15 percent, so the value of the HBTC is $750.
Who is Eligible for the First-Time Home Buyers Tax Credit
You are eligible if you
- buy a qualifying home and
- neither you nor your spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.
If you have a disability, or are buying a home for a related person with a disability, you do not have to be a first-time home buyer to qualify for the Home Buyers Tax Credit. However, the home must be bought to be more accessible or to provide a better environment for the needs and care of the person with the disability.
What Homes Qualify for the First-Time Home Buyers Tax Credit
To qualify for the First-Time Home Buyers Tax Credit, a home must be a housing unit located in Canada, including mobile homes, condominiums and apartments. Shares in coop housing that provide an equity stake also qualify.
Also, you or the related person with a disability must intend to occupy the home as a principal place of residence no later than one year after buying it.
Sharing the Tax Credit
If you both qualify, you and your spouse or a friend can share the tax credit, but the total can not be more than the total allowable tax credit (e.g. $750 for 2009).
How to Claim the First-Time Home Buyers Tax Credit
You claim the First-Time Home Buyers Tax Credit when you file your income tax return, beginning with the 2009 income tax year.
