As a first time home buyer, you probably have many questions. That’s why www.Realtysavvy.ca offers step-by-step guide to buy your first home. In This page you will find information about first time home buyer tax credit.
1. What is the home buyers tax credit?
For 2009 and consequent years, the home buyers tax credit is a new non-refundable tax credit, based on an amount of $5,000, for specific home buyers that purchase a qualifying home after Jan 27, 2009
2. How is the new home buyers tax credit calculated?
The first time home buyer credit provides a 15 percent credit on a max of $ 5000 of home buying expenses for example legal fee, land transfer taxes etc .That mean that you will get max of $ 750 as a tax relief.
3. Am I qualified for the home buyers tax credit ?
You will succeed to get home buyers tax credit only if:
you or your wife or common-law partner possessed a qualifying home; and you did not live in another home purchased by you or your wife or common-law partner in the year of acquiring or in any of the four former years.
If you are a person with a impairment or are buying a home for a relative with a disability, you do not have to be a first time home buyer. However, the home must be purchased to enable the person with the impairment to live in a more easy to access residence or in an community more suited to the personal needs and care of that individual.
4. What is a qualifying home?
A qualifying home is a home that is located in Canada and obtained after Jan 27, 2009. This includes existing homes and those being built. Single family homes, semi detached homes, townhouses, mobile homes, condo units, and apartments in duplexes, triplexes, fourplexes, or condo buildings all qualify. A share in a cooperative housing corporation that permit you to own, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only offers you with a legal right to occupy does not meet the requirements.
Also, you must aim to live in the home or you must intend that the relative with a impairment lives in the home as a principal residence no later than one year after it is obtained.
5. Who is considered a person with a impairment for purposes of the home buyers tax credit?
For the purposes of the home buyers tax credit, a person with a impairment is someone who is entitled to receive a disability benefits for the year in which the home is purchased, or would be entitled to claim a disability benefits, if we ignore that costs for attendant care or care in a nursing home were claimed for the Medical Expense Tax Credit.
6. If I buy a house, can my wife or common-law partner get the home buyers tax credit?
Either one of you can receive the credit or you can share the credit. However, the total of your combined claims cannot surpass $750.
7. My friend and I intend to collectively buy a home, and we both satisfy the requirements for the home buyers tax credit. Can we both get the credit?
Either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750.
8. Do I have to register the purchase of the home under the applicable land registration system?
Yes. Your ownership in the home must be registered according to the land registration system applied to where it is situated.
9. How will I claim the home buyers tax credit?
Beginning with the 2009 personal income tax return, line 369 is added into the Schedule 1, Federal Tax to allow you to receive the credit in the year in which you purchased the home.
10. Do I have to submit any documents with my income tax return?
No. However, you must make certain that this info is accessible if it is demanded by the Canada Revenue Agency.
11. Is the home buyers tax credit connected to the existing Home Buyers’ Plan?
No. Although some of the qualify requirements for the home buyers tax credit and the Home Buyers’ Plan are similar, the two are not associated. Your eligibility for the home buyers tax credit will not change whether or not you also participate in the Home Buyers’ Plan.
12. In which tax year can I get the home buyers tax credit ?
You can get the home buyers tax credit in the taxation year in which the qualifying home is purchased.
13. If I purchase a condo possession takes place in one taxation year but the legal transfer of ownership only takes place in the next tax year, in which tax year can I receive the home buyers tax credit ?
You can get the home buyers tax credit in the next year in which your ownership in the condos will be registered according to the land registration system or other similar system applicable systems where it is situated.