The Home Buyers Tax Credit has become the Home Buyers Program.
The Home Buyers’ Tax Credit (HBTC) 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 home buyer, which means that you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.
As an example of the latter, if you acquired a home in 2019, you must not have owned a home in the previous 4 years.
Additionally, persons with disabilities are eligible for the HBTC, even if they are not first-time home buyers. A person with a disability is defined as someone eligible for the disability tax credit. To be eligible, the disabled person must purchase the home for the purpose of living in a home that is more accessible or better suited to their needs.
If you have family members who are disabled, you may purchase a home for them and claim the credit yourself. The home must be one that is better suited to the condition of that person. For you to claim the credit, the disabled person must be a relative, defined by the Canada Revenue Agency as an individual connected by blood relationship, marriage, common-law partnership, or adoption.
Which Homes Qualify for the HBTC?
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.
How to Claim the Home Buyers’ Amount
- To claim the Home Buyers’ Tax Credit, enter the amount of $5,000 on line 31270 of your tax return.
- For 2019, the 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 HBTC 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.
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