The First-Time Home Buyer’s Tax Credit
By using the First-Time Home Buyers’ Tax Credit, or HBTC, eligible first-time home buyers can claim a $10,000 non-refundable income tax credit, which could result in tax savings of up to $1,500.
How the First-Time Home Buyers’ Tax Credit works
There’s no need to apply or be approved for the HBT. Instead, you simply claim it as part of your annual tax filing process.
To claim: Enter the $10,000 Home Buyer’s Amount on Line 31270 of your income tax return for the year you purchased your first home. (This amount is calculated at the lowest personal tax rate, currently 15%.)
The government allows you to split the amount with your spouse or common-law partner, but your combined total claims must not exceed $10,000. The credit results in a $1,500 rebate on the taxes you owe for the year.
If you owe less than $1,500 in taxes, you can only reduce your taxes to $0. You won’t get an additional refund as this is a non-refundable tax credit. Keep all your home buying documentation in case the CRA requires proof of eligibility.
Who's eligible?
To be eligible to claim the HBTC, you (or your spouse or common-law partner) must:
Buy a qualifying home registered in your (or your spouse’s or common-law partner’s) name. It can be an existing property or under construction and includes single-family structures, townhouses, condo units and more.
Be a first-time home owner, meaning that you did not reside in a property that you or your spouse or common-law partner owned in the previous four years.
The qualifying home must become your principal place of residence within one year after it’s bought or constructed.
Eligible persons with a disability can apply for the tax credit without needing to be a first-time home buyer.
Properties that qualify for the First-Time Home Buyers’ Tax Credit
You’ll only be able to take advantage of the HBTC if you purchase a qualifying home. The list of acceptable house types includes:
Single-family houses.
Townhomes and semi-detached houses.
Apartments and condo units.
Mobile homes.
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Other assistance for Canadian home buyers
In addition to the HBTC, the federal government offers several other programs to help you afford your first property. Since they are separate offerings, you can claim the tax credit and reap the benefits of these programs, too.
The Home Buyers’ Plan allows first-time home buyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) tax-free. You must repay the amount within 15 years.
The GST/HST New Housing Rebate allows someone buying an eligible newly constructed home to recover some of the GST, or the federal part of the HST, they’re required to pay.
First Home Savings Accounts give first-time home buyers the chance to maximize down payment savings. Contributions, up to the $8,000 annual limit, are tax deductible. Any income or gains you see from qualified investments are also exempt from taxes.
Some provinces may offer home buying programs specifically designed to make homes more affordable for first-time buyers, too. Both British Columbia and Ontario, for example, have a land transfer tax refund first-timers can access. Check with your municipal government to see what incentives might be available in your province.
Frequently asked questions
How much can the First-Time Home Buyers’ Tax Credit lower my taxes?
How much can the First-Time Home Buyers’ Tax Credit lower my taxes?
The First-Time Home Buyers’ Tax Credit, or HBTC, can lower your taxes by up to $1,500 in the year you purchased your home.
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