Buying a home can be a daunting task, especially if you are a first-time homebuyer. The Canadian government has taken steps to make this process easier and more affordable through the introduction of the first-time home buyer’s tax credit.
The first-time home buyer’s tax credit was introduced in Canada in 2009 as part of the government’s economic action plan. It was designed to help first-time homebuyers offset some of the costs associated with buying a home. The tax credit provides eligible homebuyers with a non-refundable tax credit of up to $5,000, which can be claimed on their personal income tax return.
To be eligible for the tax credit, you must meet certain criteria. First, you must be a first-time homebuyer or be purchasing a home for the first time in five years. Second, you must have a written agreement to purchase or build a qualifying home. Finally, you must intend to use the home as your primary residence within one year of purchasing or building it.
Qualifying homes include new or existing single-family homes, semi-detached homes, townhouses, mobile homes, condominiums, and apartments. To qualify for the tax credit, the home must be located in Canada and must not have been previously owned by you or your spouse or common-law partner.
The tax credit can be claimed by either the homebuyer or their spouse or common-law partner. The credit can only be claimed once and must be claimed in the year the home is purchased or built. If you are purchasing a home with someone else, such as a spouse or friend, the tax credit can be split between the two of you.
The first-time home buyer’s tax credit can provide significant savings for eligible homebuyers. For example, if you purchase a home for $250,000, you could be eligible for a tax credit of up to $5,000. This could help offset some of the costs associated with purchasing a home, such as legal fees, land transfer taxes, and moving expenses.
The first-time home buyer’s tax credit is a valuable tool for eligible homebuyers in Canada. It can provide significant savings and help make the process of buying a home more affordable. If you are a first-time homebuyer or are purchasing a home for the first time in five years, be sure to explore your eligibility for the tax credit and take advantage of this opportunity to save on your home purchase.
Find out more details here:
Line 31270 – Home buyers' amount - Canada.ca
Jim Perks is a Calgary REALTOR who divides his time working with both sellers of houses and buyers of homes. He has been an agent since 2010