Tax Credit for First Time Home Buyers
There is nothing more fascinating than buying your first home. It may take years of strife and planning to reach a level when you are financially ready to buy your own home. However, as home is the most expensive asset, it is essential to gather all information about tax rebates, home buyer plans and other such schemes to save as much as possible.
The First-time Home Buyers' Tax Credit assist first time buyer in recovering closing cost like legal expenses, inspections, and land transfer taxes, so they can save the money for down payment. The first time home buyer tax credit is non-refundable tax credit that reduces the amount of taxes you owe.
As per the home buyers' tax credit, first time buyers get a rebate of $750, which shall be claimed within the one year of purchase and it is non-refundable. In case, you are buying a home with a spouse or a legal partner, the combined claim cannot be more than $750.2. It is required to include your claim in your personal tax return under line 369.3 to claim it. There are certain criteria that have to be met to qualify for tax credit:
- In order to claim the First-time Home Buyers' Tax Credit, the home buyer should buy an existing or new home in Canada.
- Such home can be single, semi, townhouse, mobile home, condo, or apartment or can also include a share in a co-operative housing corporation giving possession to the buyer.
- The buyer must be intended to occupy it within a year of buying it.
- If you are buying a property with a spouse or partner, you all can claim the credit as long as everyone qualifies for it. However, the total amount claimed cannot exceed $5,000 for one property.
- Such buyer should not have owned a home in the previous four years. If you are buying home along with your spouse, it should be registered in either your name or your spouse's name and must not have been living a home owned by your spouse in the previous four years. One is required to provide all the requisite documents to claim the home buyer tax credit.