The government back in 2009, figured that first-time home buyers were disadvantaged to those that already had a home, and may or may not be able to get into their first home easily. They developed the Home Buyers’ Amount and on your 2014 and 2015 income tax filing you could claim an amount up to $5,000. I have a feeling this credit will go way of the dodo and disappear in the next couple of years.
You can claim an amount of $5,000 for the purchase of a qualifying home acquired in the prior tax year, if both of the following apply: 1) you or your spouse or common-law partner acquired a qualifying home; and 2) you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).
This is a non-refundable tax credit, which means it’s added to your basic personal exemption, and other non-refundable credits, to reduce your taxes owing. In effect it’s only $750 off your taxes owing.
A qualifying home must be registered in your and/or your spouse’s or common-law partner’s name in accordance with the applicable land registration system, and it must be located in Canada. It includes existing homes and homes under construction. The following are considered qualifying homes:
A share in a co-operative housing corporation that entitles you to own and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only gives you the right to tenancy in the housing unit does not qualify.
Persons with disabilities
You do not have to be a first-time home buyer if: 1) you are eligible for the disability tax credit; or 2) you acquired the home for the benefit of a related person who is eligible for the disability tax credit.
The purchase must be made to allow the person with the disability to live in a home that is more accessible or better suited to the needs of that person. For the purposes of the home buyers’ amount, a person with a disability is a person who is eligible for a disability tax credit for the year in which the home is acquired, or a person who would be entitled to claim the disability amount if they did not claim costs for attendant care or care in a nursing home on lines 330 or 331.
You must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.
Completing Your Tax Return
Enter $5,000 on line 369 of your Schedule 1, Federal Tax.
You and your spouse or common-law partner can split the claim, but the combined total cannot exceed $5,000.
When more than one person is entitled to the amount (for example, when two people jointly buy a home), the total of all amounts claimed cannot exceed $5,000.
For the first-time home buyer, this credit can be a little extra incentive to buy that home. While not a large credit, when it comes to taxes, every little bit helps.
Should you Start a Home-based Business After Retirement?
Avoid These Common Mistakes When Claiming Charitable Contributions
What Can I Deduct as a Business Expense?
Why does Your Marital Status Matter for Taxes?
Should I Teach my Kids About Taxes?
How to Retire the Right Way
Is a Registered Education Savings Plan (RESP) Worth it?
What Child and Family Benefits are Left?