Everything You Need to Know About the First-Time Homebuyers’ Tax Credit (HBTC) in Canada

If you’re a first-time home buyer in Canada, you may be eligible for a tax credit that can help you save money. This credit provides a tax credit of up to $1,500 to eligible home buyers, but it’s important to understand the eligibility requirements and how to claim it. Read on to learn more about the First-Tiime Home Buyers’ tax credit in Canada.

What is the First-Time Homebuyers’ Tax Credit in Canada?

The First-Time Home Buyers’ Tax Credit in Canada is a federal program that provides a tax credit to eligible first-time homebuyers. This credit can be worth up to $1,500 and can help offset some of the costs associated with buying a home, such as legal fees and land transfer taxes. To be eligible for the credit, you must meet certain criteria, including being a first-time homebuyer and purchasing a qualifying home.

Who is eligible for the First Time Home Buyers’ Tax Credit?

To be eligible for the first-time homebuyer tax credit in Canada, you must meet the following criteria:

 

  1. You must be a first-time home buyer, which means you have not owned a home in the last four (4) years.
  2. You or your spouse/common-law partner must have purchased a qualifying home.
  3. You must have a written agreement of purchase and sale for the qualifying home.
  4. You must intend to occupy the home as your principal residence within one (1) year of purchasing it.
  5. You must not have claimed the First-Time Home Buyers’ Tax Credit in any previous year.

How much can you claim the First Time Home Buyers’ Tax Credit?

The First-Time Home Buyers’ Tax Credit in Canada provides a tax credit of up to $1,500 to claim on your tax return. This credit can be used to offset the amount of income tax you owe, which can result in significant savings. It’s important to note that the credit is non-refundable, which means that if the credit exceeds the amount of tax you owe, you will not receive a refund for the difference. However, you can carry forward any unused portion of the credit to future tax years.

How to claim the tax credit

To claim the First-Time Home Buyers’ Tax Credit in Canada, you must first ensure that you meet the eligibility criteria. This includes being a first-time home buyer, meaning you have not owned a home in the past four (4) years, and having purchased a qualifying home. Once you have confirmed your eligibility, you can claim the credit on your tax return by completing Schedule 1 and attaching it to your T1 Income Tax and Benefit Return. Be sure to keep all relevant documents, such as your purchase agreement and mortgage documents, in case the Canada Revenue Agency requests them for verification.

Important considerations and tips

In addition to meeting the eligibility criteria and claiming the First-Time Home Buyers’ Tax Credit on your tax return, there are a few other important considerations and tips to keep in mind. For example, the First-Time Home Buyers’ Tax Credit is non-refundable, meaning it can only be used to reduce the amount of taxes owed, not to receive a refund. Additionally, if you are purchasing a home with someone else, such as a spouse or partner, both of you must meet the eligibility criteria to claim the credit. Finally, it’s important to consult with a tax professional or financial advisor to ensure that you are maximizing your tax savings and taking advantage of all available credits and deductions.

 

SOURCE: First-Time Home Buyers’ Tax Credit (HBTC) – Canada.ca

AUTHOR
Bonnie Visentin – Sales Representative

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Visentin Real Estate
www.visentinrealestate.com

Be sure to watch David Visentin on the popular long-running HGTV program LOVE IT OR LIST IT

In each episode designer Hilary Farr and realtor David Visentin compete for the homeowners’ final real estate decision on whether to stay in their newly renovated home or to sell it and move on to another home better suited to their current needs.

 

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