Tax Credit for First-Time Home Buyer’s
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The federal government has initiated the First-time Home Buyers’ Tax Credit to help Canadians buying their first homes. Included in the ‘Canada’s Economic Action Plan,’ the program was intended to assist new homeowners with closing costs. These costs may cover land transfer taxes, home inspections, and legal expenses. Here’s some additional information you may need:
- At prevailing taxation rates, the Home Buyers’ Tax Credit allows first-time homeowners a rebate of $750.
- You must claim the nonrefundable credit in the year when you purchase the house.
- If you’re buying the property in partnership with a friend, partner, or spouse, the total of both your claims cannot go over $750.
- You or your spouse should intend to buy a “qualified” property.
- Registration of the property should be in your or your spouse’s name.
- You should own a home for the first time in the last 4
- You cannot have lived in a property that your spouse owned in the last 4
- You must present the necessary paperwork showing that you own the house.
Qualification Criteria for the First-time Home Buyers’ Tax Credit
To be called a “qualified” property, the house must meet certain conditions:
- The property must be located in Canada.
- It can be an existing or newly-constructed property.
- Apartments, condos, mobile homes, semi, and single homes are all included in the scheme.
- The property can be a share in a co-operative housing corporation according to which you receive ownership of the house.
- You must intend to move into the house within 12 months of buying it.
Home Buyers’ Tax Credit for the Physically Challenged
If you’re physically challenged and qualify for a disability amount in the tax return you file in the year when you purchase the home, you can claim the Home Buyers’ Tax Credit. You need not be a first-time homeowner and can request for a rebate if the home is designed to meet your specific requirements and you intend to move into it within 12 months of the purchase.
Land Transfer Tax Rebate for First Time Homebuyers
Homebuyers in the provinces of Prince Edward Island, British Columbia, and Ontario can avail of the land transfer tax rebate according to their regulations. Each province allows a specific rebate according to the location and value of the property. The rebate can also depend on whether or not the owners are first-time homebuyers. Depending on certain conditions, residents of the city of Toronto can avail of a rebate of a maximum of $3,725 on the municipal land transfer tax.
GST/HST New Housing Rebate
According to the GST/HST New Housing Rebate, you can claim a rebate on a part of the sales tax. Here are certain conditions:
- You must buy a home under construction.
- You must conduct extensive renovations on your existing residential property.
- You can claim rebate only if the value of the purchased property is $450,000 or less.
- The rebate amount will depend on the purchase price of the home.
- All qualifying Canadians can claim this rebate even if they’ve owned residential property before.
In 2017, a new Canadian mortgage law specified that every Canadian who was applying for an unsecured mortgage at a federally regulated financial institution had to pass a mortgage stress test. Even a hefty down payment was not a sufficient reason for waiving the test....