‘Canada’s Economic Action Plan’ introduced this tax credit to help Canadians in buying their first homes. They designed to assist regain closing costs as land transfer taxes, legal expenses, and inspections.
This credit works out to a refund $750 for all first-time buyers. You must claim the credit within the year after purchasing your first home, and it is non-refundable. Furthermore, the home you buy must be a ‘qualified’ home. If you buy a home with a friend, partner, or spouse the joint claim cannot surpass $750.
How do you meet the criteria for the First-time Home Buyers’ Tax Credit?
To be qualified for this credit, the home has to meet the following conditions:
- Be a new or existing home
- Be able to involve a share in a co-operative housing corporation which will give you ownership of the home
- Be a single, semi, townhouse, mobile home, condo, or apartment
- You must occupy the home within 1 year of buying it
- Be inside Canada
To be qualified for this credit, you have to meet the following conditions:
- Your spouse or you must buy a qualifying home and register in your spouse or your name
- You must not have owned a home in the last 4 years
- You must give documents verifying the buy of the home
- You must not have lived in a home possessed by your spouse in the last 4 years
Info for disabled people
It is unnecessary to be a first-time homebuyer if you a person with a disability to claim the Home Buyers’ Tax Credit. People with disabilities can claim a disability amount on their tax return in the same year they buy the home. They can claim for this credit if the home bought is appropriate for their needs, and the person inhabits the home in one year from the date of buying.
Land transfer tax repayment for first-time buyers
First-time buyers in Prince Edward Island, Ontario, and British Columbia have land transfer tax repayment. The provinces have their own laws about who is qualified to claim it. The sum of the repayment varies with the cost of the home, which province you live in, and if you have already possessed a home.
In the City of Toronto, the first-time buyers can get a repayment of $3,725 on the municipal land transfer tax if they meet the required criteria. You can apply for this repayment whether you are buying a Toronto condo, house, or townhouse.
GST/HST New Housing Repayment
If you repair an existing home or buy the home before it is constructed you can qualify for a repayment a part of the sales tax. The sum of the GST/HST new housing repayment is determined by the buying price of the home, and you can claim it if the remaining buying price is $450,000 or less. Besides first-time homebuyers, all Canadians who qualify have the right to apply for this repayment no matter if they possessed a home earlier.