As much as you may want to own your own property, today’s high real estate prices can make it seem like an out-of-reach goal.
Luckily for us Canadians, there are some government programs in place such as the First-Time Home Buyer Incentive to help make homeownership a reality.
Here’s everything you should know about this incredible incentive and how it can help you become a proud homeowner.
The Background Info on the First-time Home Buyer Tax Credit
As part of Canada’s Economic Action Plan to help Canadians purchase their first home, the First-time Home Buyer Tax Credit creates a helpful tax break for new homeowners. Available nation-wide, the credit offers a $5,000 non-refundable income tax credit amount, which generates a maximum of $750 in federal tax relief.
When you complete your tax return for the year in which you purchased the home, you can apply for the credit using line 31270 of Schedule 1. Prior to the 2019 tax year, the applicable line on the tax return was 369.
The non-refundable credit must be claimed within the year of purchase.
How to Qualify for the First-time Home Buyer Tax Credit
To be eligible to receive the First-time Home Buyer Tax Credit, the Canadian property you purchased must be an existing home or a newly built home purchased after January 27, 2009. You must plan on living in the home no later than one year after the purchase.
Condos, townhouses, single-family homes, semi-detached homes, duplexes and shares in a co-operative housing corporation that give possession of the home are eligible.
The property needs to be registered in either you or your spouse’s/common-law partner’s name. You must be a first-time homebuyer unless you have a disability. In that case, you can claim this amount every time you purchase a home. If the property is purchased for a disabled individual, the home must be suitable for their needs.
Finally, you cannot have owned a home or lived in a home owned by your spouse during the four years prior to the purchase.
Additional Programs to Support Home Buyers
Want to maximize your savings as a home buyer? The Government of Canada also offers the following programs to support Canadians’ homeownership dreams:
- First-Time Home Buyer Incentive: First-time home buyers with a minimum down payment for an insured mortgage can receive a shared equity mortgage from the government, resulting in reduced mortgage payments.
- Home Buyers’ Plan (HBP): Use up to $35,000/year from your Registered Retirement Savings Plans (RRSPs) to purchase or build a qualifying home.
- GST/HST New Housing Rebate: Receive a rebate of a portion of the GST/HST you paid for a new or extensively renovated home.
Looking for more information on ways to make purchasing a home a reality? For additional details about applicable financial incentives, as well as insider knowledge about homes for sale in Vaughan, contact me today.