In 2009, the federal government introduced the First-Time Home Buyers’ (FTHB) tax credit, which provides for a $5000 tax credit for qualifying homes (amounting to up to $750 in tax relief for purchase expenses). Could you be eligible for the credit? Who can claim the credit on their tax return? What is a qualifying home? Read on to find out!
Eligibility
You may be surprised to learn that you may be eligible for the FTHB credit even if the home you’re purchasing isn’t your first. You can claim this credit if you or your spouse/common-law partner obtained a qualifying home AND if you didn’t live in a home owned by you or your spouse/common-law partner in the year you obtained the home or in the preceding four years. (The latter criterion qualifies you as a first-time home buyer.)
If you have a disability and are eligible for the disability tax credit OR you obtained the home for the benefit of a relative eligible for the disability tax credit, you do not need to be a first-time home buyer.
If you are fortunate to have been gifted a home, you may also be eligible for the tax credit provided you meet all other criteria. However, the donor may need to report capital gains once the home has been gifted.
Qualifying Home
Qualifying homes may be already in existence or under construction. The home must be located in Canada and must be appropriately registered under your name or the name of your spouse or common-law partner. Single-family homes, semi-detached homes, townhomes, mobile homes, condominium and apartment units all qualify, as do select shares in cooperative housing corporations. Of note, the purchaser(s) or relative eligible for the disability tax credit must occupy the home as their principal residence within one year of acquisition.
Tax Credit
The total tax credit available for a qualifying home is $5000. You may claim the amount in full, or you may share the credit with your spouse/common-law partner. (Note: the credit should be entered on line 369 of your federal tax return.)
Do you have any questions about the FTHB credit or about mortgages in general? We’d love to answer them! Send us an email or DM us on Instagram; your question could be featured in an upcoming post.