Are you in the market for your first home?
Or, with historically low interest rates and lots of selection to choose from, are you thinking about taking an informed step from renting to owning?
If so, then I've got some fantastic news for you that will put a smile on your face... It's called the First Time Home Buyers Tax Credit (HBTC).
Launched by the Federal Government in 2008, the HBTC gives qualifying first-time home buyers a non-refundable tax credit based on an amount of $5,000. The exact amount of the tax credit depends on the tax year's lowest personal income tax rate.
For example, in 2009, this amount was 15%, which meant that qualifying first time home buyers received a tax credit of $750 (15% x $5,000). In 2010, the lowest personal income tax rate remained at at 15% – so that means folks who opened the door to their first new home might be in for a handy $750 windfall when they file their 2010 taxes this year.
Either you, your spouse or your common law partner can claim to credit, or you can share it. If you share, then obviously the combined total can't exceed $750.
Qualifying for the HBTC
You'll qualify for the HBTC if you meet the following criteria:
- You, your spouse, or our common law partner purchases a qualifying home in 2011 (more on what a "qualifying home" is in a moment).
- You didn't live in a home that you, your spouse, or your common law partner owned in 2011, or in any of the last four years. (So there you have it, if you haven't owned in over 4 years, consider applying for this tax credit too.)
Definition of a "Qualifying Home"
According to the Federal Government:
"A qualifying home is a housing unit located in Canada acquired after January 27, 2009. This includes existing homes and those being constructed. Single-family homes, semi?detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co?operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify."
In addition, your ownership of the home must be formally registered with your respective land registration system.
Not the Same as the Home Buyers' Plan
It's important to remember that the HBTC is not the same as the Government's existing Home Buyers' Plan, which allows you to put up to $20,000 of your RRSP towards the down payment of your first home (which you then pay back in instalments over a period of 15 years). If you'd like to learn more about the HBTC, visit the Federal Government's website at: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html#q1
Question about Buying your First Home?
Buying your first home is an exciting time, and there are many do's and don'ts that you want to know so you can make the right decision. Call me at 403-860-8291 to get the accurate and timely new home buying information you need – when you need it!