Buying a home can be burden on your wallet. Have no fear; the Canadian government has come up with a way to help with the Home Buyers Tax Credit! The HBTC will assist first time homebuyers with the costs linked to the purchase of a new home.
This $5,000 non-refundable HBTC amount will apply to qualifying homes bought after January 27th, 2009 and will provide up to $750 in federal tax relief so you can breathe a little easier.
Sounds good so far but, does your home qualify? A qualifying home is a housing unit situated in Canada that the individual or individual’s spouse or common-law partner anticipates to occupy as the principal place of residence (no later than one year after its acquisition). Moreover, any unused portion of your HBTC may be claimed by your spouse or common-law partner. Also, when two or more qualified individuals jointly purchase a home, the credit may be shared but, the total credit amount claimed cannot exceed $5,000.
Here’s the best part, all first time homebuyers are eligible for the HBTC if this simple criteria is met. If neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of the purchase or your new home or in the four preceding calendar years then you are considered a first time homebuyer.
You can claim the HBTC on your tax return. You do not have to submit any documentation with your tax return. However, make sure you have all the documentation supporting the purchase transaction in the off chance those documents may be requested by Canada Revenue Agency.