TL;DR: if you're a first time home buyer, you get free money on your tax return from the government - take it!
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If you are a first time home buyer, you can apply for a tax credit when you file your annual taxes. This First Time Home Buyers’ Tax Credit was created to help with the purchase of a home. It can take the sting out of closing costs, inspections and land transfer taxes.
The tax credit is $750 for all first-time buyers, no matter how much the property cost. However, you need to claim it within a year of the purchase. The home you bought must also be considered a qualified home. Even if you have purchased the property with a spouse or partner the tax credit will not be more than $750.
Qualifying for the tax credit
To qualify for the tax credit your property must:
- Be in Canada
- Be an existing or new home
- Be a single, semi-detached, townhouse, mobile home, condo or apartment dwelling
- Be one you occupy within a year of the purchase
It can include the share you pay into a co-operative housing corporation if you have possession of the home
In addition to your property qualifying, you must also meet the following conditions:
- Your or your spouse purchased a qualifying property
- Home must be registered in your name or your spouse’s name
- You did not own a home in the past four years (funky date math applies; beware)
- You did not live in a home that was owned by your spouse in the past four years (weird date math here too)
- Have documents that support the home purchase
Home buyers’ tax credit for those with disabilities
Home buyers that have a disability do not need to be first time buyers to qualify for a tax credit. If you are able to claim a disability amount on your tax return for the year the home was purchased, you will qualify. This is helpful for those purchasing property that has been specially designed for disabled residents. To get your tax credit, you need to live in the home within one year of purchase.
Land transfer tax rebate for first-time buyers
In addition to the tax credit, residents of Ontario, BC or PEI can also get a land transfer tax rebate. The rules of home buyers who qualify are regulated by the province they live in. How much you can get back will depend on which province the property is in, the value of it and whether the owners have held any property before.
GST/HST new housing rebate
Those who have bought their home before it was built, or who had to do some big renovations on their property could also get a rebate for sales tax. How much the rebate will be depends on the purchase price of the home and is only available on property with a net purchase price of less than $450,000. Unlike the first-time home buyers tax credit, any Canadian who has purchased a home can apply.