As part of 'Canada's Economic Action Plan', the First-Time Home Buyers' Tax Credit was launched to help the citizens of Canada in buying their first home. The plan is structured to assist recovery of closing costs which include inspections, land transfer taxes, legal expenses, etc.
Those individuals who are eligible as 'first-time homebuyers can claim a $5,000 non-refundable income tax credit on a qualifying home. These buyers would get up to a $750 tax rebate. The credit must be claimed within one year of buying the home. In order to avail of the First-Time Home Buyers' Tax Credit, one has to meet certain requirements.
Must be in Canada
Must be a new or an existing home
It must be a single, semi, townhouse, mobile home, condo, or an apartment
Can include a share in a cooperative housing corporation that gives the homeowner the possession of the home
The homeowner must have the intention to occupy the home within one year of its purchase
You or your spouse must buy a 'qualifying' home
The home must be registered in either your name or your spouse's name
You must not have owned a home in the past four years
You must not have lived in a home which is owned by your spouse in the previous four years
You must present documents supporting the purchase of the home.
Home Buyers' Tax Credit for people with disabilities
People with disabilities do not need to be first-time homebuyers to claim the Home Buyers' Tax Credit. For clarification, a person with a disability is defined as a person who can claim a disability amount on their tax return in the very year in which they purchase the home. To be able to claim the Home Buyers' Tax Credit, it needs to be proved that the home is suitable for the disabled person's requirements. It must also be occupied by the disabled person within one year of its purchase date.
Other help one can seek to include the:
First-Time Home Buyer Incentive
First-Time Home Buyer Incentive is a program by the federal government which helps Canadians in buying their first home by offering them between 5 to 10% of the price of the house which can be used as a down payment. This is quite a big financial help for home buyers as their mortgage cost comes down when they make a bigger down payment.
GST/HST New Housing Rebate
You could also qualify for a rebate on a portion of the sales tax in the event of buying the home before it is constructed or in case you renovate an existing home to a substantial extent. The amount you will get as the GST/HST new housing rebate is dependent on the buying price of your home. This rebate can be claimed only if the net purchase price of your home is $450,000 or less.
The good news is that this rebate can be claimed by all Canadians who qualify for it irrespective of the fact that they have owned a home previously or not.
If you are a first-time home buyer who is confused about the incentives and rebates available to you, or are simply looking for help in buying a new home, do reach out to us at LendX.