Insights & advice
What is the first-time homebuyer tax credit?
Oct 2021 – 15 min read
The first-time homebuyer’s tax credit (HBTC) is a non-refundable income tax credit.
It’s available to all eligible taxpayers in Canada who buy a property that falls under the government’s guidelines.
This credit can be used with other rebates and incentives to make first-time homeownership more affordable.
There are many things to think about when it comes to buying your first home, including what tax relief might be available to you.
For example, the first-time homebuyer’s tax credit – also known as the HBTC or the Home Buyer’s Amount – is available from the Government of CanadaOpens a new website in a new window - Opens in a new window. Introduced in 2009, this is available to all eligible taxpayers. This shouldn’t be confused with the First-Time Homebuyer IncentiveOpens in a new window, which is a separate program available from the federal government.
Provided you meet the eligibility requirements, you could receive a non-refundable tax credit that can provide a little help financially as you become a homeowner.
How much is the HBTC?
The HBTC offers first-time buyers a $5,000 non-refundable income tax credit. If you bought your home during the qualifying tax year and meet all the necessary criteria, you can claim the amount when you file your tax return and receive a $750 rebate.
How to know if you qualify
You and anyone you purchase the home with (such as a spouse or common-law partner) should be considered first-time buyers by the government. This means that you haven’t lived in a home that you or your partner have bought in the past 4 years. You must also live in the home full-time and not use it as a rental property.
Properties that qualify
You could qualify for the HBTCOpens a new website in a new window - Opens in a new window if the home you’re buying is a:
- Single-family house
- Semi-detached house
- Mobile home
- Condominium unit
- Unit in a duplex, triplex, fourplex or apartment building
People with disabilities
If you claim a Disability Tax credit on your tax return or are buying the home for someone who does, you could also qualify even if you’re not a first-time buyer. To meet the government’s eligibility criteriaOpens a new website in a new window - Opens in a new window, you must:
- Purchase a home that’s accessible and/or better suited to your needs
- Claim the credit in the same year you buy your home
- Live in the home as your full-time residence no later than 1 year after buying it
How to claim the HBTC
On your tax return, make sure to fill in Line 31270 of your Schedule 1 with the amount of $5,000.As the tax credit is designed for first-time buyers, you can only claim it for 1 home - however, that doesn’t mean you need to claim it on 1 tax return. If you’re buying with a partner for example, you could claim the full $5,000 yourself, your partner could claim it, or you could split it between both of you. You have options just as long as the total amount claimed doesn’t exceed $5,000.
Can I claim any other tax credits or incentives?
There are other rebates and incentivesOpens in a new window available to first-time buyers, including:
The First-time homebuyer incentive (FTHBI)
This government program offers eligible first-time buyers a shared equity loan of up to 10%.
First-time homebuyer land transfer tax
Depending on where you buy, you could receive a full or partial land transfer tax rebate.
GST/HST New Housing Rebate
You may be able to claim a provincial or federal tax rebate.
RRSP Homebuyer Plan
With this federal plan, you can borrow money from your RRSP towards the purchase of your first home.
Speak to your advisor or accountant if you think you might be eligible for the HBTC.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.