How To Lower Your Income Taxes If You Are A First-Time Home Buyer?
Sunday Jan 09th, 2022
There is nothing more exciting than buying a home, especially if it’s your first home. Chances are, you’ve been preparing and saving for a while now, and you’ve been looking to take advantage of any programs, discounts, or tax cuts that are available to you. First-Time Home Buyers’ Tax Credit (HBTC) or Home Buyers’ Amount can be a great perk you may qualify for that will help you reduce your income tax.
Who qualifies for First-Time Home Buyers’ Tax Credit (HBTC)?
HBTC is a federal non-refundable tax credit available for first-time homebuyers or those who haven’t owned a home in the past 4 years. The purchased home must be in Canada and registered with the appropriate land registry office — in your name, or in your and your spouse's or common-law partner's names.
How much can you claim from First-Time Home Buyers’ Tax Credit (HBTC)?
If you owe income taxes for the year you purchase a home then you can claim $5000 on your own or can claim a combined $5000 between you and your spouse or common in law. This equals to a one time, non-refundable $750 tax reduction at a 15% tax rate (lowest income tax rate)
What type of properties qualifies for the First-Time Home Buyers’ Tax Credit (HBTC)?
Several types of properties can qualify you First-Time Home Buyers’ Tax Credit (HBTC), including:
- Single-family houses
- Semi-detached houses
- Mobile homes
- Condo units
- Apartments in duplexes, triplexes, fourplexes or apartment buildings
- An ownership share in a housing co-op that gives you an equity interest in the co-op
- Homes under construction also qualify.
However, you must move into the finished property within one year of the purchase closing date.
If you are all set to begin the home-buying journey, then start searching for the right real estate agent that can help you find your dream home. Check out their reviews, and look into experience and knowledge to find the right fit for you.