Fraser Valley Living, Home Buying, Your Next Home
Did you become a first-time homebuyer in 2020? Did you know that you can apply for a $5,000 rebate for the purchase of your new home?
The Home Buyers’ Amount (HBA) is a non-refundable credit that allows first-time purchasers of homes, and purchasers with disabilities, to claim up to $5,000 in the year when they purchase a home.
To be eligible for the Home Buyers’ Tax Credit, you must meet both of these criteria:
- You or your spouse or common-law partner purchased a qualifying home.
- You are a first-time homebuyer, which means that you did not live in another home owned by you or your spouse or common-law partner in the year of the acquisition or in any of the four preceding years.
As an example of the latter, if you acquired a home this year, you must not have owned a home in the previous 4 years.
Which Homes Qualify for the HBA?
A qualifying home is almost any type of home as long as it is located in Canada and registered in your or your spouse or common-law partner’s name. This includes existing homes and homes under construction.
According to the CRA, the following are considered to be qualifying homes:
- Single-family houses
- Semi-detached houses
- Mobile homes
- Condominium units
- Apartments in duplexes, triplexes, fourplexes, or apartment buildings
A share in a housing cooperative also qualifies if it gives you the right of ownership of the underlying property.
You must intend to occupy the home, or you must intend that the related person with a disability occupy the home, as a principal place of residence no later than one year after it is acquired.
Enter $5,000 on line 31270 of your return, if you are not splitting the amount with your spouse or common-law partner.
You and your spouse or common-law partner can split the claim but the combined total cannot be more than $5,000.
When more than one person is entitled to the amount (for example when two people jointly buy a home), the total of all amounts claimed cannot be more than $5,000.
How to Claim the Home Buyers’ Amount
- To claim the Home Buyers’ Amount, enter the amount of $5,000 on line 31270 of your tax return.
- The non-refundable tax credit rate of 15 percent means the actual reduction of your taxes will be $750. If your federal taxes are less than $750, your credit will be reduced accordingly since it is a non-refundable credit.
- You can divide the credit between your return and your spouse or common-law partner’s return, but the combined total claimed cannot be greater than $5,000.
- If you are claiming the HBA for a home purchased for a disabled relative, enter the amount on the same line on your tax return. You may be asked by the CRA to explain how you are related to the disabled person.
Home Buying, Market Intelligence, Real Estate News