If you are a "First Time Home Buyer," there's a Tax Credit in store for you!
The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes, can be a particular burden for first-time homebuyers who must pay these costs, as well as save money for a down payment. To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009.
Here are a few Q & A's from the Canada Revenue Agency website:
1. What is the Home Buyers' Tax Credit (HBTC)?
For 2009 and subsequent years, the budget proposes to introduce a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., closing after this date).
2. How is the new HBTC calculated?
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.
3. Who is eligible for the HBTC?
An individual will qualify for the HBTC if:
- they acquire a qualifying home; and
- neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.
4. What is a qualifying home?
A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
For more details & information go to: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html