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    Ontario First-Time Home Buyer Series Part 1: Home Buyer’s Tax Credit

    Buying your first home is a big step in your personal and financial life. As a first-time home buyer, you likely have many questions regarding all aspects of the process. In this four-part series, we will be exploring some of the basics regarding the first-time home buying experience so that you can have a good understanding of what to expect and how best to approach this important step both legally and financially.

    Part 1: Home Buyer’s Tax Credit 

    The Home Buyer’s Tax Credit (HBTC) is a federal, non-refundable credit that allows first-time purchasers of homes to claim a tax refund of up to $750 in the year when they purchase a home.

    How do you qualify?

    To be eligible for this rebate, the purchaser must meet the following 3 conditions:

    • You or your spouse/common-law partner must be buying a qualifying home within Canada
    • Must intend to occupy the home within one year of purchase
    • Cannot have lived in a home owned by you or your spouse within the previous 4 years

    What kinds of homes are covered?

    Most types of homes qualify for the HBTC , including:

    • single-family houses
    • semi-detached houses
    • townhouses
    • mobile homes
    • condominium units
    • apartments in duplexes, triplexes, fourplexes, or apartment buildings

    How do you claim the credit?

    To take advantage of this rebate, it must be claimed on your personal tax return for the year affiliated with your home purchase. On line 369 of your federal tax return, you can claim up to $5000 for the purchase of a new home, thus resulting in a maximum credit of $750 (the credit is calculated at the lowest tax bracket of 15%).

    Can two people claim the credit?

    If you purchase with your spouse, common-law partner, or even a friend, then either one of you can claim the credit (or share it). However, the combined total cannot exceed $750.

    Persons with disabilities

    Persons with disabilities can actually claim the home buyer’s tax credit even if they are not first-time buyers. If you are eligible for the disability tax credit, then you should be able to purchase a home and claim the credit, providing that the home was purchased for the purposes of increased accessibility.

    Additionally, if you have a family member with a disability who will be living in the home, you can even purchase a home for them and claim the credit yourself.

    What other rebates or credits are available?

    First time home buyers should also be aware of the HST new housing rebate offered in Ontario. This is different from the home buyer’s tax credit. If you are purchasing a new home from a builder, consider exploring whether you qualify for this housing rebate.

    When purchasing your first home in Ontario, always consult with your real estate lawyer to ensure that you qualify for the various rebates and credits available to you. If you are a first time home buyer looking to claim a rebate or tax credit and have questions regarding your eligibility, contact real estate lawyer Frank Bourgault at Merovitz Potechin LLP.

    The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.

    Posted By: Frank Bourgault of Merovitz Potechin LLP

    Associate

    Frank’s practice focuses on commercial real estate and land development with an emphasis on real property acquisition/disposition, financing and condominium/subdivision development.

    Frank acts for a broad range of clients including developers, builders, lenders and investment companies. Prior to joining Merovitz Potechin LLP, Frank practiced at a prominent Bay Street firm in Toronto and gained experience with all types of condominium projects, including standard, common elements, vacant land and leasehold condominiums.

    Frank holds a Juris Doctor from the University of Ottawa. While at law school, Frank served as a caseworker for the school’s Business Law Clinic where he assisted entrepreneurs and small businesses in both official languages. He also worked in the Ministry of Finance’s Legal Services Branch and the Department of Justice’s Tax Law Section. Prior to law school, Frank obtained a Bachelor of Commerce (Finance) from the Telfer School of Management at the University of Ottawa.

    In his spare time, Frank is an avid fitness and sports enthusiast. He enjoys playing football, tennis, and rugby, and is a passionate supporter of the Green Bay Packers.

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