As part of Canada’s Economic Action Plan in 2009, the Government of Canada enacted a non-refundable first-time home buyer’s tax credit. This home buyer credit is based on the lowest personal income tax rate for the year and can be claimed by the named homeowner, the spouse of the homeowner or can be divided between spouses. This new home tax credit is also available as a disability tax credit (DTC) to individuals who qualify.
Eligible homes include single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, as well as apartments in duplexes, triplexes, fourplexes, and apartment buildings.
The Canadian Tax Calculator includes the first-time home buyer’s tax credit. For more details and qualifying information on the new home tax credit for first-time buyers, visit Canada Revenue’s website.
Another program that was updated in the Economic Action Plan was the Home Buyer’s Plan (HBP). The HBP now allows first-time home buyer’s to withdraw up to $25,000 (tax-exempt) from a Registered Retirement Savings Plan to build or buy a new home. Again, details can be found at the Government of Canada’s website .
The home buyers tax credit and home buyer’s plan may help you get one step closer to building the home of your dreams! Discuss these important programs with your accountant or preferred lender.