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Before making a major financial decision you
should consult a qualified professional.
A non-refundable tax credit was enacted as part of the 2009
Federal Budget, based on
an amount of $10,000 ($5,000 for taxation years prior to 2022, increased
by federal 2022 Budget) for first-time home buyers who acquire a qualifying
home after January 27, 2009. The home is considered to be acquired
once it is registered in your name in accordance with the land
registration system or other similar system applicable where it is located
(in Canada). The year of acquisition is the year in which the tax
credit can be claimed. If you missed claiming this credit in the
year of acquisition, you can file an adjustment to your tax return. See
our article on Changing Your Tax Return.
The tax credit is based on a maximum of $10,000 per qualifying home.
Qualifying
Home for the Home Buyers' Tax Credit
A qualifying home means:
a housing unit located in Canada, or
a share of the capital stock of a cooperative housing corporation, the
holder of which is entitled to possession of a housing unit located in
Canada
A qualifying home is one that is acquired, jointly or otherwise, if:
the home is acquired by the individual or their spouse/common-law partner
and
the individual intends to inhabit the home as a principal place of
residence not later than 1 year after acquisition
the individual did not live in a home that was owned, jointly or
otherwise, by them or their spouse/common-law partner, in the calendar
year of the home purchase or in any of the 4 preceding calendar years,
or
the home is acquired by the individual for the benefit of a
"specified person" in respect of the individual, and
the individual intends that the home be inhabited by the specified
person as a principal residence not later than 1 year after acquisition,
and
the purpose of the acquisition of the home by the individual is to
enable the specified person to live in
a home that is more accessible by the specified person or in which
the specified person is more mobile or functional, or
an environment better suited to the specified person's personal
needs and care.
Specified
Person / Persons With Disabilities
This means the individual, or a person who is related to the individual, if
they are eligible for the disability tax credit in the year the home is
acquired. In this case, the individual does not have to be a first-time home
buyer.
Eligibility for the Home Buyers' Tax Credit
To be eligible for this credit, you must not have lived
in another home owned by you or your spouse or common-law partner in the calendar year of the home
purchase or in any of the four preceding calendar years.
Tax Tip: If you previously owned a home that you did not live in
(e.g., you rented it out), you may still qualify for the tax credit.
First-Time
Home Buyers' Tax Credit Year of Acquisition
The home is considered to be acquired in the taxation
year in which the home is registered in the name of the individual.
As per s. 118.05(2) of the Income Tax Act, "an individual is
considered to have acquired a qualifying home only if the individual's
interest (or for civil law, right) in it is registered in accordance with
the land registration system or other similar system applicable where it
is located. Tax Interpretation 2010-0357201E5 addresses the
situation where a condo buyer occupies the condo in one tax year but is
not registered as the legal owner until the subsequent tax year. The
HBTC is not available until the subsequent tax year.
First-Time
Home Buyers' Tax Credit - Home Received as Gift
Note that if a home is gifted to a person, as long as
all other requirements are met, the person can still qualify for the home
buyers' tax credit. The person who gifted the home is deemed to have
disposed of it, and may have to report a capital gain.
The credit can be claimed by the individual who
acquires the home, or by the spouse or common-law partner of that
individual, or can be split between spouses.
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